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liability is established under State law, the transferee is
liable for the transferor’s taxes due as of the time of the
transfer, as well as interest and any additions to tax, to the
extent of the value of the assets transferred. See Estate of
Glass v. Commissioner, 55 T.C. 543, 575 (1970), affd. 453 F.2d
1375 (5th Cir. 1972).
Petitioner argues that there was no transfer of property
from JCC.3 Petitioner maintains that the $286,737.27 he received
from JCC was property he was entitled to receive directly from
Westinghouse. Petitioner contends that $286,737.27 of the
$1,050,000 settlement payment was in exchange for any claim
petitioner may have had against Westinghouse. Specifically,
petitioner asserts, in the context of this case, that
Westinghouse damaged his business reputation and rendered him
unable to borrow funds.
Petitioner’s factual assertions are not supported by the
record. There is no evidence that the settlement agreement was
entered into to protect Westinghouse from a possible legal action
by petitioner in his individual capacity. Prior to the default
on the Westinghouse loan, JCC performed consulting duties in
3 For purposes of this legal discussion, references to “JCC”
are to JCC, the parent corporation, and all of JCC’s wholly owned
subsidiaries. We note that their returns were consolidated, and,
hence, the disputed tax liability is consolidated. Factually and
legally, there is no meaningful distinction to be made between
any of the corporate entities linked by ownership to JCC or
petitioner.
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Last modified: May 25, 2011