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and additions to tax.6 And Sloan’s estate became insolvent when
David distributed all of the estate’s assets to himself.
Accordingly, David is personally liable in his capacity as the
fiduciary (personal representative) of Sloan’s estate for the
estate and income taxes and additions to tax owed the Government up
to the value of the assets distributed to himself.
Because the value of the assets distributed to David ($11.6
million) exceeded the debt owed the IRS, David is personally liable
as fiduciary of Sloan’s estate under 31 U.S.C. section 3713(b) for
the entire amount of the debt.
Whether David Is Personally Liable as a Transferee
Now we turn to whether David is personally liable as a
transferee of the assets of Sloan’s estate pursuant to section
6901.
The Commissioner may collect unpaid income taxes of a
transferor of assets from a transferee of those assets. See sec.
6901(a)(1), (c)(1); Commissioner v. Stern, 357 U.S. 39, 42 (1958).
Section 6901 does not create or define a substantive liability but
merely provides a remedy for enforcing the existing liability of
the transferor. See Hagaman v. Commissioner, 100 T.C. 180, 183
(1993). The Commissioner bears the burden of proving that the
6 We have no doubt that David knew there would be a
considerable amount of Federal taxes due from his father's $11.6
million estate. David was highly educated and sophisticated in
business matters.
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