- 18 -
sent the taxpayer before further proceedings for
collection of the tax liability are continued. The
section, however, in terms applies only to a deficiency
in a tax and does not apply to the liability of a
transferee in respect of the tax of the taxpayer.
Therefore, in proceedings against the transferee,
notice need not be given the taxpayer under section
274(a). However, under the substitute agreed to by the
conferees, the liability of the transferee is collected
in the same manner as the liability for tax. Section
274(a) is thus incorporated by reference, but the
result of such reference is that for procedural
purposes the transferee is treated as a taxpayer would
be treated, and under section 274(a) notice would be
sent to the transferee (and not the taxpayer) in
proceedings to enforce the liability of the transferee.
[H. Conf. Rept. 356, 69th Cong., 1st Sess. (1926),
1939-1 C.B. (Part 2) 372.]
Case law is likewise unequivocal in rejecting arguments that
a notice of deficiency to or assessment against the transferor
must precede enforcement of liability against the transferee.
See Kuckenberg v. Commissioner, 309 F.2d 202, 206 (9th Cir.
1962), affg. on this issue 35 T.C. 473 (1960); Bresson v.
Commissioner, supra at 178; Gumm v. Commissioner, 93 T.C. 475,
484 (1989); Maher v. Commissioner, 55 T.C. 441, 457 (1970), affd.
on this issue 469 F.2d 225 (8th Cir. 1972); Cleveland v.
Commissioner, 28 B.T.A. 578, 580-581 (1933), affd. 77 F.2d 184
(5th Cir. 1935). The rule as developed by this Court is that
“the Commissioner is not required to issue a notice of deficiency
or to make an assessment against the transferor where efforts to
collect delinquent taxes from a transferor would be futile.”
Bresson v. Commissioner, supra at 178. The following, oft-quoted
rationale underlies this position:
Page: Previous 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 NextLast modified: May 25, 2011