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(1) Income, estate, and gift taxes.--
(A) Transferees.--The liability, at law or
in equity, of a transferee of property--
(i) of a taxpayer in the case of a
tax imposed by subtitle A (relating
to income taxes),
* * * * * * *
(h) Definition of Transferee.--As used in this
section, the term "transferee" includes donee, heir,
legatee, devisee, and distributee * * *.
The courts have recognized that section 6901 does not create
or define a substantive liability, but merely provides a proce-
dure by which the Government may collect from a transferee of
property unpaid taxes owed by the transferor of the property.
Commissioner v. Stern, 357 U.S. 39, 42 (1958); Hagaman v. Com-
missioner, 100 T.C. 180, 183 (1993). The existence and extent of
a transferee's liability is determined under applicable State
law. See Commissioner v. Stern, supra at 42-45; Hagaman v. Com-
missioner, supra at 183-185. The parties agree that the appli-
cable State law in this case is the law of the State of Colorado.
Respondent argues that, as is true in other areas of the tax
law, see Gregory v. Helvering, 293 U.S. 465, 469-470 (1935), the
substance, and not the form, of the MSSTA transaction controls
our determination of whether Mr. Scott and Ms. Scott are liable
as transferees of MSSTA. In support of respondent's position,
respondent relies principally on Bates Motor Transp. Lines, Inc.
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