Sherman R. Solaas - Page 6

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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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