Thomas H. Scott and Lynn D. Scott, Transferees - Page 29

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          Service.9  We find that Mr. Callison's letter and his testimony             
          to which respondent objects are "Evidence of conduct or state-              
          ments made in compromise negotiations", Fed. R. Evid. 408, and              
          are inadmissible under FRE 408.10  See McPike, Inc. v. United               
          States, 15 Cl. Ct. 94, 98-99 (1988).                                        
               We shall now address the transferee liability issues in this           
          case.  Respondent bears the burden of showing that each peti-               
          tioner is liable as a transferee of property of MSSTA, but not              
          that MSSTA was liable for MSSTA's unpaid tax liability.  See sec.           
          6902(a); Rule 142(d).                                                       
               Section 6901 provides in pertinent part:                               
                    SEC. 6901(a).  Method of Collection.--The amounts                 
               of the following liabilities shall, except as herein-                  
               after in this section provided, be assessed, paid, and                 
               collected in the same manner and subject to the same                   
               provisions and limitations as in the case of the taxes                 
               with respect to which the liabilities were incurred:                   

          9  For example, the record shows that the revenue agent auditing            
          MSSTA's 1989 return preliminarily proposed that MSSTA realized              
          $1.6 million from the sale of substantially all of its assets to            
          AST.  By way of further illustration, petitioners stated in their           
          1991 return that the stock of AST that they acquired had "a cost            
          basis of $749,760" which was "the value assigned to * * * [those]           
          shares as determined by the Internal Revenue Service in their               
          examination of * * * [MSSTA]".  Nonetheless, the Service and,               
          inter alia, MSSTA and the Scotts ultimately agreed in the closing           
          agreement that MSSTA realized $801,820 from the sale of sub-                
          stantially all of its assets to AST and that $199,652 of (1) the            
          value of the AST stock transferred to the Scotts and (2) the                
          consulting fee paid to Mr. Scott was an amount realized by MSSTA            
          for MSSTA's assets.                                                         
          10  Even if we had held differently on the evidentiary matters at           
          issue, such a holding would not have affected our conclusions               
          with respect to the transferee liability issues presented.                  

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