: Heirs and fiduciaries fiduciaries can be held personally liable liable for unpaid taxes of an estate. The potential liabili liability ty arises when the e state fails to pay its estate taxes or it fails to pay taxes ta xes which were owed by the decedent. deced ent. The unwary fiduciary may end up indemnifying an estate esta te obligation obligation to the government. She must must take steps to assure that all taxes are paid by the estate each time she participates in administration. Transferee liability for taxes of an estate can arise in several ways. Under state law where a creditor transfers property in fraud of c reditors, the Service has all the rights of a private credit or t o collect a claim for taxes. The rights rights of the Service and a creditor are defined in such bodies of laws as: (1) The law of Fraudulent Conveyances; (2) Rights of creditors in Life Insurance Benefits. Under the Internal Revenue laws, IRC §6324 makes transferees and donees liable for estate and Gift taxes of a decedent or donor. Transferee liabilities are also imposed by other federal laws. For example, a fiduciary may be held personally liable if he pays the debts of an estate before taxes under 31 U.S.C. §192. The IRS may seek tax of a transferor from a transferee by: (1) Instituting a civil action against the transferee under state law, for example, to set aside a conveyance as fraudulent under the laws of the state; or (2) Proceeding to collect the tax of the transferor from the transferee in the same manner as that of a delinquent taxpayer pursuant to the provisions of IRC §6901, for example, by sending the transferee a Notice of Deficiency asserting her liability liability under the applicable state laws. Typically, Typically, the IRS uses the transferee liabili liability ty provisions of IRC §6901, but the use of the procedure proc edure itself will will depend on state law.
IRC §6901 provides a method of collecting the unpaid tax liability liability "at law or in equity" of a transferee of property. As a general rule, the liability of the transferee "at law and in equity" is a question of state, not federal law, Commissioner Commissioner v. Stern, 357 3 57 U.S. U.S. 39 (1958), Kathy P. Enters., Inc. Inc . v. U.S., U.S., 84-2 USTC USTC ¶9620(D.C. Az. 1984), aff'd on other issues, 779 F.2d 1143 (9th Cir. 1986). State law normally normally governs whether there the re is a transferee liabili liability ty and the t he extent exte nt of liability, liability, but this general principle principle is subject subject to certain c ertain qualifications. qualifications. First, state law may not answer all questions relating to a transferee's transferee 's liabili liability, ty, and second, where a question que stion is not definitively answered answered by state law, federal fede ral law is is consulted. Third, certain transferee liabili liability ty issues are not controlled by state law because the th e supremacy of the federal government prevents the th e application of state law. For example, IRC §6901(c) establishes a Statute of Limitations for the assertion of transferee liability. The Statute of Limitation applies to a claim by the Service, instead of the shorter state Statute of Limitations required required of other othe r creditors to proceed proce ed under the t he state's law. Finally, Finally, the government need not proceed under state law to assert statutory transferee liability in all situations.
IRC §6901 provides a method of collecting the unpaid tax liability liability "at law or in equity" of a transferee of property. As a general rule, the liability of the transferee "at law and in equity" is a question of state, not federal law, Commissioner Commissioner v. Stern, 357 3 57 U.S. U.S. 39 (1958), Kathy P. Enters., Inc. Inc . v. U.S., U.S., 84-2 USTC USTC ¶9620(D.C. Az. 1984), aff'd on other issues, 779 F.2d 1143 (9th Cir. 1986). State law normally normally governs whether there the re is a transferee liabili liability ty and the t he extent exte nt of liability, liability, but this general principle principle is subject subject to certain c ertain qualifications. qualifications. First, state law may not answer all questions relating to a transferee's transferee 's liabili liability, ty, and second, where a question que stion is not definitively answered answered by state law, federal fede ral law is is consulted. Third, certain transferee liabili liability ty issues are not controlled by state law because the th e supremacy of the federal government prevents the th e application of state law. For example, IRC §6901(c) establishes a Statute of Limitations for the assertion of transferee liability. The Statute of Limitation applies to a claim by the Service, instead of the shorter state Statute of Limitations required required of other othe r creditors to proceed proce ed under the t he state's law. Finally, Finally, the government need not proceed under state law to assert statutory transferee liability in all situations. Example, if the Service wished wished to collect an estate esta te and gift gift tax liability, liability, it can proceed under u nder Section 6324, which creates its own transferee liabili liability, ty, rather rathe r than state stat e law. Simil Similarly, arly, where a fraudulent conveyance conveya nce by a bankrupt taxpayer is at issue, the Bankruptcy Code would be applicable.
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THE ELEMENTS OF TRANSFEREE TRANSFEREE LIABILITY
In most jurisdictions jurisdictions before a transaction tra nsaction may be tagged as fraudulent, prejudice to t o the rights rights of creditors cre ditors must must result therefrom. Two types of fraud in conveyancing conveya ncing are recognized: (1) FRAUD IN FACT - Where actual fraudulent intent to hinder or delay creditors exists; (2) FRAUD IN LAW OR IN EQUITY - Where the terms of any agreement or the nature of the transaction
itself evidence a conclusive presumption in law that the conveyance is fraudulent. If there is insufficient insufficient consideration for the Debtor's transfer of property (which exists in any transfer to a beneficiary from an estate) estate ) even though there is no proof of intent to defraud, it is presumed "fraud in law or in equity," which is fraud that is presumed from the circumstances. Even if there is apparent sufficient consideration for the transfer, "fraud in fact" may be established if there is a specific intent to defraud creditors. Generally the elements of fraud in law or in equity which constitute a fraudulent conveyance are: (a) A gift or sale for less than fair fa ir market value; (b) A then-existing or contemplated indebtedness against the transferor (i.e. accrual of a liability, not an assessment); assessment); and a nd (c) A retention of insufficient property by the transferor to pay his indebtedness (insolvency). There is no need for the th e Service to establish an evil motive motive to assert a ssert fraud in law. The Service Service is not required to prove intent but merely the three elements. The transferee may, in fact, have been an innocent recipient via a bequest beque st in a will, will, but if the three th ree elements exist, the IRS will will prevail. An example would would be a father who transfers most of his assets to a trust for his children and is later audited a udited and assessed with a large deficiency for taxes which had accrued prior to transfer. In such an instance, the IRS could attack the trust because the transfer meets the three tests, even though the father has no intent to defraud the IRS. Obviously, this could occur in many estate situations where the decedent had used aggressive estate planning techniques to avoid estate taxes.
In a case where a husband and wife, after tax assessments had been made against them, gratuitously conveyed certain real estate to a trust company as trustee and named the wife the beneficial owner, after which the wife transferred her beneficial interest to their son, the transfer tra nsfer was found void and was set aside a side against the United States, U.S. v. Mitchel, 271 F. Supp. 858 (N.D. Ill. 1967). When relying upon fraud in fact, the IRS must prove an actual intent to defraud in order to set aside a conveyance. Courts will look for "badges of fraud" in making their determination with respect to fraud in fact. Although Although the badges ba dges of fraud may amount to little more than suspicious circumstances, circumstances, they may be used by a court to infer a fraudulent conveyance. A transfer may be fraudulent if it is made with actual intent to defraud creditors (Actual Fraud), even if the transferor is solvent. The conveyanc e is fraudulent where it is made with actual actua l intent, distinguis distinguished hed from intent presumed in law, to hinder, delay or defra ud either present or future creditors. This actual actua l intent to defraud is established with the same evidence that constitutes c onstitutes badges of fraud. Although Although states vary v ary in badges of fraud which are recogni rec ognized zed the following following is is a list which have been be en used by various courts to infer fraudulent conveyance: (1) An inadequate or fictitious consideration consideration or a false recital as to consideration; (2) The fact that property prope rty is transferred by a debtor de btor in anticipation of or during a pending suit; suit; (3) Transactions which are not in the usual course or method of doing business; business; (4) The giving giving of an absolute conveyance conveya nce which is intended only as security; (5) The failure to record the conveyance or an unusual delay in recording the payment; (6) Secrecy and haste are ordinarily ordinarily regarded as badges ba dges of fraud but are not in themselves conclusive of fraud; (7) Insolvency or substantial indebtedness of the grantor; (8) The transfer of all the Debtor's property, propert y, especially when she is insolvent or greatly financially financially embarrassed; (9) An excessive effort to clothe a transition with the appearance of fairness; (10) The failure of parties charged with fraudulent conveyance to produce available evidence or to testify with sufficient sufficient preciseness as to the th e pertinent details, de tails, at least in cases where the circumstances under which the fraud, transfer took place are suspicious; (11) The unexplained retention of possession of property transferred by Grantor after conveyance; (12) The buyer's employment of the seller seller to manage the business as before, selli selling ng the goods which were the th e subject of the transfer; (13) The failure to examine or to take an inventory of the goods bought or the presence of looseness or incorrectness in determining the value of property; (14) The reservations of a trust for the benefit of the grantor and the property conveyed; (15) The existence of a blood or other close relationship between the parties to the transfer. In addition to the pa rticular badges of fraud set out above, a bove, various other circums c ircumstance tances, s, singly singly or collectively may constitute badges of fraud, such as the concealment of an alteration in the attestation clause of the
conveyance; the transferee's failure to keep a record of the dates and amounts of the loans, or advances made by him to the transferor; failure to de mand repayment; misdescription misdescription or insufficient insufficient description of the property transferred; sending the money received from the transferee out of the country; assignment of the property to the seller rather than to the purchaser; and the fact that the purchaser, soon after transfer, offered to resell the property at a much higher price.
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PROCESS OF LAW
A transferee includes, by judicial interpretation, "one who takes property of another without full, fair and adequate consideration to the prejudice of creditors." By way of illustration, Section 6901 states the term transferee includes: (1) Donees; (2) Heirs; (3) Legatees; (4) Devisees; and (5) Distributees. Distributees. The regulations expand the classes of transferees by adding: (6) Distributees of a decedent's estate; (7) Shareholders of a dissolved corporation; (8) Assignees Assignees or donees donee s of an insolvent insolvent person; p erson; (9) Successors of a Corporation; (10) A party to a reorganization as defined in Section 368 in the Internal Revenue Code; and (11) All other classes of distributees. distributees. The most important class of transferees are successors of or distributees from corporations and those having dealings dealings with an estate estat e as fiduciary or beneficiary.
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FIDUCIARIES AND BENEFICIARIES
The liabili liability ty of a fiduciary for any tax owed to the United United States is based upon Sections 3713(a) and 3713(b) 3 713(b) of the Revised Statutes. Fiduciary liability liability is entirely distinct distinct from transferee t ransferee liabili liability, ty, although a lthough §6901 provides summary summary assessment assessment and a nd collection procedure agains a gainstt both the th e transferee and the fiduciary. In general, the liability of a fiduciary arises from the fiduciary's payment on behalf of an estate of debts that do not have priority priority over the debts to the United United States. On the other hand, transferee liability liability is asserted where
the transferee takes property of the transferor, without full, fair and adequate consideration to the prejudice of the United States as a creditor. Both an estate and the executor or the administrator of the estate in his representative capacity can be liable as transferees of the assets of the deceased under §6901, Estate of Harry Miller, Miller, 42 TC 593 (1964); Estate of Robert Harrison, Harrison, 16 TC 727 (1951); Estate of Irving Smith, Smith, 16 TC 807 (1951); Estate of L.A. McKnight, 8 TC 871 (1947); Ewart v. Commissioner, 84 TC 912 (1985), aff'd 814 F.2d 321 (6th Cir. 1987); (co-executor who received the property from the estate was held liable as transferee under Ohio law because transfer rendered the estate insolvent). The estate and its executors are relieved only where notice of transferee liability has not been received before the assets have been distributed and the executor execut or or administrator administrator dismissed dismissed under local law. The executor execut or may apply for release from personal liabili liability ty by written application and payment pa yment of the amount of tax determined under this provision provision of IRC §6905(a). Transferees who receive property prope rty includable in the gross estate of decedent dece dent are a re personally liable liable for unpaid estate taxes and donees of property are personally liable liable for gift taxes pursuant to the t he provisions of IRC §6324. One method of enforcing e nforcing this personal personal liability liability is by advising advising the transferee tra nsferee of the assessment procedures of §6901, although these procedures are not exclusive. Where the tax involved is decedent's unpaid income taxes, a transferee liability liability may be asserted a sserted against beneficiaries of an estate if the estate is insolvent insolvent or has ha s been compl co mpletely etely distributed. (If an executor exe cutor fails to pay taxes tax es and allows distributions distributions to be made to the beneficiaries which result in an assertion of a transferee liability against the beneficiaries by the IRS, that executor can be assured that the beneficiaries will probably seek to sue the executor for violating his fiduciary duties.) The The basis of liabili liability ty is that a beneficiary b eneficiary is a transferee of a transferee, that t hat is, the dec edent has transferred property to the estate, which in turn, has transferred property to the beneficiary. Under these circumstances, if either the decedent or the estate was insolvent and the property was distributed to the beneficiaries, the transfer would be a fraudulent conveyance and the executor or administrator would be personally liable liable under Section 3713(b) for paying a legacy or devise before a debt to the United States. A cotenant in jointly owned property who acquires the entire property upon the death of a deceased taxpayer has generally been held not to t o be a transferee for purposes of Section 6901. Since Since the surviving surviving joint joint tenant tena nt or tenant by entirety takes the full estate by virtue of the creation of the tenancy not on the death of the cotenant, the survivor is not a transferee and is not liable for unpaid income taxes of a decedent, Tully v. Commissi Commissioner, oner, 121 F.2d 350 3 50 (9th Cir. 1941). But that th at cotenant cot enant may become be come liable for estate taxes taxe s via IRC §6324. However, where individual individual partners transferred property to their t heir partnership, although the partnership was a separate entity and the property became partnership property, the individual partners were held to be transferees, Commissioner Commissioner v. Kuckenberg, Kuckenbe rg, 305 F.2d 202 (9th Cir. 1962).
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INSURANCE PROCEEDS
Where a beneficiary receives life insurance proceeds under a policy owned by the deceased taxpayer, he is liable liable as a transferee t ransferee at a t law for unpaid estate taxes by virtue of the provisions of Section Section 6324. The liabili liability ty of a life insurance beneficiary for the decedent's income taxes depends upon whether or not the taxes have been assessed before the death of the decedent. If there has been a tax assessment and a lien has attached to all property and rights of property of the decedent before his death, then the beneficiary merely takes the proceeds of the policy subject to the lien. However, only the amount of the proceeds equivalent to the cash surrender value of the policy at the time of the decedent's death is subject to the lien. The balance does not constitute property or rights of property of the insured, to which the tax lien would have attached at the time of his death, United States States v. Best, Be st, 357 U.S. U.S. 51 (1958). Where Whe re there is no prior federal tax lien, state law determines the existence and extent of the beneficiary's liability. Where state law exempts the beneficiary of a life insurance insurance policy from the claims claims of the insured's creditors, the beneficiary bene ficiary is not subject to transferee liabili liability, ty, Commissi Commissioner oner v. Stern, 357 U.S. U.S. 39 (1958). However, if under state sta te fraudulent conveyance conveyan ce law, it
can be shown that the deceased taxpayer paid premiums with the intent to defraud creditors, the beneficiary is liable liable as a transferee for the amount of the premiums paid plus plus interest, but not the t he balance of proceeds of the policy, United United States v. Truax, 223 F.2d 229 (5th Cir. 1955). In Stern, the beneficiary of the insurance policy was the wife of the decedent. Where decedent's estate is the beneficiary of the policy and the proceeds are paid to the estate, which in turn pays them to the widow, the widow is the transferee of the estate and not a beneficiary ben eficiary of the life life insurance policy. Accordingly, Accordingly, the widow would be liable for transferee in equity if the estate esta te were insolvent, Kieferdorf v. Commissi Commissioner, oner, 142 F.2d 723 (9th Cir. 1944) cert. denied, d enied, 323 U.S. U.S. 733 (1944).
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SECTION 6324 - THE SPECIAL ESTATE TAX LIEN
A general tax lien attaches to all property belonging to the taxpayer after assessment, demand and non-payment of the tax and secures payment of all types of federal taxes, including estate taxes. To secure payment of estate taxes, a second type of lien called the "special estate tax lien," also exists in favor of the government without assessment assessment or notice and a nd demand, the special estate tax ta x lien comes into existence automatically on the date of death. It continues for ten years unless, before the end of the ten-year period, the estate tax is paid in full or becomes unenforceable unenforc eable by expiration e xpiration of the Statute of Limi L imitations tations for collection, IRC §6324(a). The Supreme Supreme Court held he ld in Detroit Bank v. United United States, 317 U.S. 329, 337 (1943) that the t he special estate tax lien lien was based upon u pon Congress' belief belief that there the re is a greater nee d of a lien in advance of assessment assessment and demand for payment of estate tax and property passing at or distributed in consequence of death than for other types of taxes. The Court also said that there was less need to protect third parties by way of a recorded notice of lien because the property passing at death is normally dealt with by probate and estate tax proceedings of public notoriety. Purchasers of property from an estate must exercise extreme caution because a special estate tax lien encumbers the property if an estate does not pay estate tax subsequently found to be due. Careful practitioners representing buyers take such precautions as asking the estate representative for evidence that all estate taxes have been paid, seeking the discharge of the special estate tax lien on the property being purchased, and a nd securing indemnity indemnity from the estate, should any estate tax liability liability arise. However, the assurance of obtaining a discharge of property from an estate tax lien or a release of lien from the Service is no longer available in every situation because the estate may not be (at least initially) subject to estate tax. Absent evidence that the Service has been paid, reliance in some form of an indemnity from the estate seems to be the method left to protect purchasers of estate property. The special estate tax lien attaches to the property includable in the gross estate of decedent. The term gross estate is a creation of the estate tax provisions of the Code, IRC §§2031-2044. Since a general lien attaches only to property and rights to property owned by decedent at the time of death and thus passing to probate, the special lien is far broader than the general lien. Therefore, where probate property is sold by an estate owing estate tax, the purchaser has bought property encumbered by the special lien. Even if the executor of the estate asks for a discharge from personal liability under §2204 and has been discharged from personal liabili liability, ty, the special lien lien is not extingui e xtinguished. shed. It continues, c ontinues, but shifts from the property transferred to the consideration received by the heirs, legatees, devisees and distributees provided that the property has been transferred to a purchaser or holder of a security interest. The shifting shifting lien lien comes into play under IRC §6324(a)(3) only where the executor execut or or other fiduciary has been be en discharged from personal liabil liability, ity, by complying complying with with §2204. If there th ere has been be en no application a pplication and discharge, the special lien lien continues cont inues to encumber the transferred property. The special lien attached to such non-probate property as dower or curtesy interest, property transferred in contemplation of a death, transfers with a retained life estate, transfers taking effect at death, revocable transfers, annuities, joint interests, powers of appointment and the proceeds of life insurance.
Property may be discharged or divested from the effects of a specialized tax lien but circumstances of discharge are dependent on whether the property is probated or not probated. Where probated property is involved a special tax lien is divested automatically from property included in the gross estate that the probate or other court c ourt having jurisdiction jurisdiction of the estate allows allows it to be used to t o pay charges c harges against against the estate and a nd administration administration expenses, U.S. U.S. v. Security First First National Bank, 30 F.2d 113 (S.D. Cal. 1939). Although Although this approval need not be obtained prior to payment of an expenditure, the automatic divesture provision only applies where the expe nditures are allowed by a court co urt of competent jurisdiction. jurisdiction. There is another discharge provision provision peculiar to the special tax lien called the "shifting "shifting lien." lien." Certain Ce rtain third parties are protected against the effects of the general lien by the requirement that the lien be publicly filed in order to be valid against against them. The special lien, lien, on the t he other othe r hand, does not require a notice to be filed for it to be effective. Rather, property sold or transferred to a purchaser or holder of security interest is automatically discharged discharged or divested from the effect e ffect of the t he lien, but the lien lien shifts to the consideration received from the purchaser or the secured lender. The shifting lien attaches to the consideration received, even if the fiduciary obtains a discharge from personal liability after audit of the estate tax return. IRC §6325(c) allows the estate to apply for discharge upon the sale of property. The application for discharge may be made on Form 4422 (Application (Application For Certificate to Discharging Discharging Property Subject to estate estat e Tax Lien). A lien lien may be foreclosed against the property that th at it encumbers enc umbers in a judicial judicial proceeding. Payment of the t he estate tax secured secu red by the t he special lien is also insured insured by the imposition imposition of personal pe rsonal liabili liability. ty. There are six categories of persons who have received property subject to the special lien and are personally liable for the amount of the estate tax: (1) The decedent's spouse; (2) The decedent's transferee; (3) A Trustee; (4) A surviving tenant; (5) A person in possession of the property by reason of the exercise or non-exercise and release of power of appointment; or (6) Beneficiary (IRC §6324(a)(2)). Each of the categories c ategories of persons are jointly jointly and severally seve rally liable liable as transferees of property includable in the gross gross estate. estate . The categories of persons personally liable for the unpaid estate tax seem broad enough to include any person having received property includable in the gross estate. A trustee is specifically specifically named as a person pe rson having personal liabili liability; ty; thus, it has bee n held that the trustee of an inter vivos trust, not the beneficiaries, is personally liable liable under unde r Section 6324(a)(2), Higley Higley v. Comm Co mmiss issioner, ioner, 69 F.2d 160 (8th Cir. 1934). Personal liability liability imposed by Section 6324 is transferee liabili liability. ty. The term "transferee" "transferee " includes with respect respec t to estate taxes "any person who, under §6324(a)(2), is liable for any part of such (estate) tax," IRC §6901(h). Transferee liability liability is enforced by two methods: (1) legal action without assessment; assessment; or or (2) assessment under the general transferee provision, §6901.
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THE SPECIAL LIEN FOR ESTATE TAX
WHERE PAYMENT IS DEFERRED
Section 6324A provides for a special tax lien in lieu lieu of the special spec ial tax lien of §6324 where payment of the estate tax has been deferred under Section 6166. If the executor: (1) makes an election under §6324A and (2) files files a lien agreement signed signed by each e ach person pe rson has an interest in property designated designated in the agreement as collateral for the payment of the deferred amount, a lien arises for the deferred amount. The lien agreement is a written agreement signed by each person who has an interest in the property designated in the agreement in which the signing signing person: (1) consents to the t he creation crea tion of a lien against against the property; and a nd (2) designates a responsible responsible person pe rson as the agent for the beneficiaries of the e state and a nd signatories signatories in dealings with with the Service Service on matters arisi a rising ng under Sections 6166 or 6324A.
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SUMMARY
Estate and trust administration administration contain many traps t raps for the unwary which might might lead to t o personal liability. liability. A fiduciary who distributes distributes the estate esta te prior to completion of the estate e state tax ta x audit could become bec ome personally liable. liable. The fiduciary also can become liable as a result of his or her failure to secure a discharge from the IRS upon conclusion of the IRS examination. Because of the extensive nature of the estate tax lien, a person acting in a fiduciary capacity could incur liability liability when liquidating property of the estate. e state. Another risk which was not developed de veloped within this discussion discussion is the fact that t hat if a beneficiary or distribute of an estate becomes the subject of o f a transferee liabili liability ty investigation investigation by the IRS, there is a great probability probability that that beneficiary b eneficiary will sue the executor executo r for errors and omissi omissions ons in her fiduciary capacity. ca pacity. Congress has given the IRS great power to pursue tax obligations due from the decedent and the estate and the unwary fiduciary might become the target of that power. Therefore, it is incumbent upon each fiduciary to fully review each estate for all tax obligations, obligations, both apparent appare nt and hidden. Upon completion completion of the IRS examination, examination, the fiduciary should seek discharge of her obligation. Even that may not prevent later litigation by the beneficiaries of the estate if they should become the subject of an IRS investigation. investigation.
THE DISAPPEARING ASSET
ESTATE ARISES | | ESTATE CONSISTS OF A
$6 MILLION SECURED NOTE AND $2 MILLION IN LIQUID ASSETS ESTATE PAYS PART OF ESTATE TAX - RECEIVES § 6161 EXTENSION ESTATE DISTRIBUTES REMAINDER OF LIQUID ASSETS TO BENEFICIARIES DAUGHTER DEFAULTS ON NOTE ESTATE FORECLOSES COLLATERAL IRS SEIZES COLLATERAL AND SELLS FOR SMALL PERCENT OF VALUE
THE MISSING TAX RESEARCH
IRS PURSUES
HEIRS
HEIRS AND EXECUTOR FOR
SUE SUE
BALANCE OF TAXES
EXECUTOR
TAXPAYER OWES TAXES TAXPAYER TAXPAYER DIES OWING TAXES
ESTATE COMMENCES EXECUTOR IS UNAWARE OF TAX LIABILITY EXECUTOR FAILS TO CHECK WITH IRS REGARDING PRIOR TAXES ESTATE DISTRIBUTES ALL ASSETS TO HEIRS IRS PURSUES HEIRS HEIRS THE POST ESTATE AUDIT OF DECEDENT
SUE SUE AND EXECUTOR EXECUTOR
1992 ESTATE ARISES WITH MORE THAN $600,000 1992 ESTATE DISTRIBUTES TO HEIRS 1993 IRS AUDITS
DECEDENT'S PERSONAL INCOME TAX RETURNS AND ASSERTS LARGE DEFICIENCY 1994 IRS PURSUES HEIRS FOR TRANSFEREE
THE PREMATURE DISTRIBUTION
ESTATE ARISES 706 FILED WITH FULL PAYMENTS ESTATE DISTRIBUTES ASSETS TO HEIRS IRS AUDITS ASSERTS LARGE DEFICIENCY TAX COURT
FINDS FOR IRS IRS PURSUES HEIRS AND EXECUTORS
THE THWARTED ESTATE PLAN
1992 TAXPAYER CREATES TRUST FOR CHILDREN AND CONVEYS MOST ASSETS 1993 IRS AUDITS 1990, 1991 & 1992 INCOME TAX RETURNS R ETURNS AND ASSERTS A LARGE LIABILITY 1994 IRS PURSUES TAXPAYER AND IS UNABLE TO COLLECT BECAUSE HE IS INSOLVENT INSOLVENT 1994 IRS PURSUES TRUST AND BENEFICIARIES WHO HAVE RECEIVED RECE IVED DISTRIBUTIONS DISTRIBUTIONS
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2/12/2007
