-23-
indictment and petitioners’ plea agreements in this case are
probative of petitioners’ fraudulent intent. Wright v.
Commissioner, 84 T.C. 636, 643-344 (1985). We also note as to
1990 that the Les both acknowledged in their separate plea
agreements that the attorney checks were taxable income to
petitioner, that they failed to advise their tax preparer about
the diverted funds, and that they knew that their taxable income
was underreported.
We hold that petitioners are liable for the fraud penalties
for 1990 and 1991 determined by respondent under section 6663(a).
D. Transferee Liability
DDL has unpaid income tax liabilities which respondent seeks
to collect from the Les in their capacity as transferees of DDL’s
assets. Section 6901 allows the Commissioner in certain cases to
collect from a transferee of assets unpaid taxes owed by the
assets’ transferor if a basis exists under State law or equity
for holding the transferee liable. Bresson v. Commissioner,
111 T.C. 172 (1998), affd. 213 F.3d 1173 (9th Cir. 2000); Gumm v.
Commissioner, 93 T.C. 475, 479 (1989). Section 6901 does not
create the liability of a transferee, but is merely a secondary
method for enforcing a transferor’s existing liability. Mysse v.
Commissioner, 57 T.C. 680, 700-701 (1972). Here, in order to
prevail on this issue, respondent must prove that he has
satisfied the procedural requirements of section 6901(a) and that
Page: Previous 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 NextLast modified: May 25, 2011