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imposed by section 3713(b), which interest began to accrue as of
the date the liability arose (when payments in derogation of the
statute were made), and continues to accrue until paid.
We agree with petitioner. When a personal representative
incurs personal liability under 31 U.S.C. section 3713(b), his or
her liability for unpaid tax, additions to tax, and interest of a
decedent is limited to "the extent of the [payments]" made in
derogation of the statute. See 31 U.S.C. sec. 3713(b). Thus,
the amount of tax and interest owed by the estate, or the value
of the property disbursed in violation of the statute, whichever
is less, is the principal obligation for which the fiduciary is
liable.8 The next inquiry is whether interest accrues on the
personal liability of the fiduciary from the date the liability
arose until paid, even if this amount exceeds the value of the
property paid in derogation of the statute. In the case of
Baptiste v. Commissioner, 100 T.C. 252 (1993), affd. 29 F.3d 1533
(11th Cir. 1994), affd. in part and revd. in part 29 F.3d 433
(8th Cir. 1994), we explored this question in depth relating to a
transferee's liability. We concluded that interest accrues on a
transferee's liability from the date it arose until paid, even if
8The stipulated record contains no evidence as to what
amount of interest had accrued on Mr. Johnson's liability as of
the date of disbursements. Thus, we cannot determine whether
that amount is greater than $30,000, although we presume the
$30,000 figure would be less that the total tax due plus interest
as of that date.
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