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Memo. 1972-65. Barring refund claims by Daniell or other
transferees who may have made payments against ACT’s tax
liability, however, we expect respondent to take any such
payments into account in computing petitioner’s ultimate
liability. See Peterson v. Commissioner, supra.
Transferee Liability for Addition to Tax for Fraud
On brief, petitioner argues that because respondent has
failed to prove petitioner’s fraud with clear and convincing
evidence, petitioner has no transferee liability for ACT’s
addition to tax for fraud. Petitioner’s argument betrays a
fundamental misunderstanding of transferee liability. Section
6901 provides the Commissioner a mechanism for collecting a
transferor’s tax liability, which may be either as to the amount
of tax shown on the transferor’s return or as to any deficiency
or underpayment of tax by the transferor. See sec. 6901(b). The
additions to tax, such as the section 6653(b) addition to tax for
fraud, are assessed and collected in the same manner as taxes,
and the term “tax” as used in the Internal Revenue Code
specifically includes, among other things, the section 6653(b)
addition to tax for fraud. Sec. 6662(a).
Accordingly, petitioner’s liability as a transferee of ACT
extends to ACT’s liability for the addition to tax for fraud as
determined in Association Cable TV, Inc. v. Commissioner, T.C.
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