- 7 - liability arose from its contractual obligations under the merger agreement and by operation of State law, petitioner’s liability as a transferee is that of a transferee at law. Petitioner nevertheless argues that the liability of a transferee, whether at law or at equity, is limited to the value of the assets it received from the transferor and that respondent bears the burden of proving that value. Petitioner’s argument is legally unsupportable. When a taxpayer is a transferee at law, the Commissioner need not establish the value of the assets received by the transferee in order to sustain his burden of proof. Harder Servs., Inc. v. Commissioner, supra; Bos Lines, Inc. v. Commissioner, T.C. Memo. 1965-71, affd. 354 F.2d 830 (8th Cir. 1965); Turnbull, Inc. v. Commissioner, T.C. Memo. 1963-335, supplemented by 42 T.C. 582 (1964); Am. Equitable Assurance Co. of New York v. Commissioner, 27 B.T.A. 247 (1932), affd. 68 F.2d 46 (2d Cir. 1933). Consequently, it is petitioner, the party who seeks to place a limit on its transferee liability, who has the burden of establishing that limit insofar as relevant.9 Rule 8(...continued) Snead, 221 P. 1032 (Okla. 1923)). 9Petitioner argues that sec. 7491 operates to place the burden of proving the value of the assets on respondent. Under sec. 7491(a)(1), Congress requires the burden of proof to be shifted to the Commissioner, subject to certain limitations, where a taxpayer introduces credible evidence with respect to factual issues relevant to ascertaining the taxpayer’s liability for tax. Sec. 7491 is applicable to court proceedings arising in (continued...)Page: Previous 1 2 3 4 5 6 7 8 9 Next
Last modified: May 25, 2011