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 some 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.
How Does the IRS Build a Case Against You?
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 must show the following:
- 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.
Hire Tax Attorney, John McDuff
The Law Office of John McDuff, P.C. will explore all potential defenses on your behalf. 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 you circumstances, John McDuff will work tirelessly to seek a favorable outcome. Contact The Law Office of John McDuff, P.C. at 512.457.1177 to discuss your case. Our law firm represents business and individuals across Austin and Central Texas in the full range of tax collection disputes, including claims involving transferee liability.