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OPINION
Section 6901(a)(1)(A) authorizes the assessment of
transferee liability in the same manner as the taxes in respect
of which the liability was incurred. This provision does not
create a new liability; it merely provides a remedy for enforcing
the existing liability of the transferor. Coca-Cola Bottling Co.
v. Commissioner, 334 F.2d 875, 877 (9th Cir. 1964), affg. 37 T.C.
1006 (1962); Mysse v. Commissioner, 57 T.C. 680, 700-701 (1972).
The Commissioner has the burden of proving all the elements
necessary to establish the taxpayer's liability as a transferee
except for proving that the transferor was liable for the tax.
Sec. 6902(a); Rule 142(d).
The substantive question of whether a transferee is liable
for the transferor's obligation and the extent of his liability
depends on State law. See Commissioner v. Stern, 357 U.S. 39, 45
(1958); Adams v. Commissioner, 70 T.C. 373, 389 (1978), affd.
without published opinion 688 F.2d 815 (2d Cir. 1982). All the
transfers in the instant case occurred in California; hence,
California law governs. Adams v. Commissioner, supra at 390.
Under California law, a person is liable as a transferee to the
extent of the value of transferred assets when such assets are
fraudulently conveyed to him. Pierce v. Commissioner, 61 T.C.
424, 432 (1974); cf. Kuzmicki v. Nelson, 225 P.2d 233 (Cal. Dist.
Ct. App. 1950).
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Last modified: May 25, 2011