What is Transferee Liability?
The IRS has wide latitude in attempting to collect unpaid taxes. In certain cases, a delinquent taxpayer may transfer his or her interest in real property or other assets in an attempt to circumvent his or her tax liability. In certain situations, the IRS has the authority to collect the tax from the person or business who received the assets in question. Legally, this is known as transferee liability.
If the IRS is building a case against you on the basis of transferee liability, it is imperative that you seek the counsel of an experienced tax lawyer.
In order to prove the liability of a transferee, the IRS has the burden of showing:
- That the assets in question were transferred without adequate consideration (i.e., you purchased an asset for substantially less than fair market value) or were transferred with the intent of defrauding creditors.
- The transferor of the assets was insolvent when the transfer was made or had insufficient assets to pay the taxes.
- The IRS made a reasonable effort to recover the tax liability from the transferor of the assets.
My Austin law firm will explore all potential defenses. For instance, we can explore whether or not the tax is owed in the first place, whether there was a transfer, or whether the IRS has exhausted all collection remedies against the transferor of the assets. If applicable, we will explore technical defenses such as the statute of limitations. Whatever the specifics of your situation, I will work tirelessly to seek a favorable outcome. I bring more than 30 years of experience in all types of complex taxation matters. In addition, I have an AV* rating under Martindale-Hubbell’s peer review system, and can ably represent your interests.
Contact Austin Tax Attorney, John McDuff
I am John McDuff. I represent businesses and individuals across Austin and Central Texas in the full range of Tax Collection disputes, including claims involving transferee liability. Call 512.457.1177 or e-mail my Austin law firm to schedule an appointment.