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to the contested notices of deficiency or any additions to tax or
interest, the tax liability in July of 1990 must have been at
least the $50,000 shown as still owing plus the between $93,000
and $94,000 paid subsequent to the transfer but prior to filing
the returns. Even these figures when combined exceed the
purported $90,000 to $100,000 in assets remaining after the
transfer.
Furthermore, because a notice of deficiency does not, as
explained above, create the underlying debt, the alleged lack of
a valid notice has no bearing upon Mr. Espinosa’s liability as of
July 1990 either for income taxes or for statutory additions to
tax or interest then accrued on his unpaid balance. Any such
additions or interest, which would hardly be insignificant after
multiple years of failing to file a return despite owing taxes,
are thus properly considered as increasing the amount by which
Mr. Espinosa was indebted to the IRS in July of 1990. We find
that at the time of the transfer of the Lidak shares to
petitioner, Mr. Espinosa was or was rendered insolvent. We
therefore conclude that respondent has sustained the burden of
establishing each element necessary to support imposition of
transferee liability on the basis of a constructively fraudulent
transfer under California law, and we need not reach the issue of
actual fraud.
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