Frank Armstrong, III, Transferee, et al. - Page 6




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                                   (ii) of a decedent                                 
                              in the case of a tax                                    
                              imposed by chapter 11                                   
                              (relating to estate                                     
                              taxes) * * *.                                           
          When proceeding pursuant to section 6901(a), respondent generally           
          may not assess or attempt to collect an estate tax deficiency               
          from a transferee without first following the normal deficiency             
          procedures set forth in sections 6211 to 6216.  See, e.g., Estate           
          of Frost v. Commissioner, T.C. Memo. 1993-94.                               
               Section 6901(h) defines the term "transferee" as follows:              
                    SEC. 6901(h) Definition of Transferee.--As used in                
               this section, the term “transferee” includes donee,                    
               heir, legatee, devisee, and distributee, and with                      
               respect to estate taxes, also includes any person who,                 
               under section 6324(a)(2), is personally liable for any                 
               part of such tax.  [Emphasis added.]                                   
               Although section 6901(a) sets forth the procedures to be               
          followed in transferee liability cases, the existence and extent            
          of a transferee's substantive liability is established under                
          section 6324(a)(2).  See Schuster v. Commissioner, 312 F.2d 311,            
          315 (9th Cir. 1962), affg. 32 T.C. 998 (1959), and revg. First              
          Western Bank & Trust Co. v. Commissioner, 32 T.C. 1017 (1959)               
          (interpreting section 827(b) of the Internal Revenue Code of                
          1939--a predecessor of section 6324(a)).  Section 6324(a)                   
          provides in pertinent part:                                                 










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