Eddie Cordes, Inc., Transferee - Page 7




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          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...)           





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