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who comes into equity with clean hands. See, e.g., United States
v. Weintraub, 613 F.2d 612, 619 (6th Cir. 1979).
The timeliness of Government claims is governed by the
statutes of limitations enacted by Congress. See United States v.
Summerlin, 310 U.S. 414, 416 (1940). There was no inexcusable
delay by respondent in asserting the claim of transferee liability
against petitioner. Nor does petitioner come before the Court with
clean hands. During the period when respondent was prevented from
taking action to assess and collect the estate tax liability from
the estate, all of the estate’s assets were distributed from a sham
Cayman Islands Trust created by Martin Fridovich to the trust
beneficiaries and thereafter transferred by them to WLLC. Although
the estate owed tax and interest in 1985 in an amount greater than
its assets, it continued to distribute assets to the estate
beneficiaries in lieu of paying the estate tax. Petitioner was a
beneficiary of the estate receiving distributions, as well as the
original personal representative of the estate. He was aware of
the estate’s tax liability when he received the distributions from
the estate.
To conclude, we hold that the doctrine of laches does not bar
respondent from assessment and collection of the $1,118,621 estate
tax liability against petitioner.
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Last modified: May 25, 2011