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a prima facie case for transferee liability, the burden of going
forward devolves upon the transferee to establish defenses
thereto, such as payment of the transferor’s liability by or on
behalf of the transferor. See Estate of McKnight v.
Commissioner, 8 T.C. 871, 873 (1947); Newsome v. Commissioner,
T.C. Memo. 1976-75.
On brief, petitioner states without elaboration that he “has
* * * learned that the Estate of Gay has also paid its liability
emanating from the Associated [sic] Cable TV, Inc. distribution.”
The record is devoid of evidence, however, of any such payment by
the Estate of Gay, or when, how, or for what purpose it might
have been made.
Daniell testified that he has paid approximately $113,000 in
satisfaction of a transferee liability claim asserted against him
by the Internal Revenue Service (IRS). Assuming arguendo that
Daniell made this payment, it is insufficient to satisfy the full
amount of ACT’s liability.13 Moreover, so long as the
possibility exists that Daniell could file for a refund,
petitioner cannot be exonerated from transferee liability. See
Holmes v. Commissioner, supra; Peterson v. Commissioner, T.C.
13 This Court has determined that ACT owed a tax liability
of $136,903, an addition to tax for fraud of $102,677, and a
substantial understatement penalty of $34,226, for a total of
$273,806. See Association Cable TV, Inc. v. Commissioner, T.C.
Memo. 1995-596. This amount does not take into account any
interest on ACT’s taxable year 1988 liability. See secs. 6602,
6622.
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