Swords v. Comm'r
United States Tax Court
R issued notices of transferee liability to Ps to collect D's unpaid Federal income tax pursuant to I.R.C. sec. 6901. R argues that the following two-step analysis applies in determining whether Ps are liable for D's unpaid tax: (1) analyze whether the subject transactions are recast under Federal law, here primarily the Federal substance over form doctrine, and then (2) apply State law to the transactions as recast under Federal law.
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R issued notices of transferee liability to Ps to collect D's unpaid Federal income tax pursuant to I.R.C. sec. 6901. R argues that the following two-step analysis applies in determining whether Ps are liable for D's unpaid tax: (1) analyze whether the subject transactions are recast under Federal law, here primarily the Federal substance over form doctrine, and then (2) apply State law to the transactions as recast under Federal law. Held: I.R.C. sec. 6901 requires that the Court apply State (rather than Federal) law to determine whether a transaction is recast under a substance over form…
1Opinion of the Court
Marvel, Judge:
These consolidated cases concern separate notices of liability that respondent issued to the cotrustees of the Julia R. Swords Trust (Swords Trust), the David P. Reynolds Trust (Reynolds Trust), the Margaret R. Mackell Trust (Mackell Trust), and the Dorothy R. Brotherton Trust (Brotherton Trust) (collectively, petitioner trusts).2 Respondent determined in the notices that petitioner trusts are liable as transferees for Davreyn Corp.’s (Davreyn) Federal income tax deficiency of $4,602,986,3 additions to tax under section 6651(a)(1) and (2)4 of $1,160,137 and $1,982, respectively,…
2Cases cited40 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- Gregory v. HelveringSupreme Court of the United States · 1935
- Commissioner v. Estate of BoschSupreme Court of the United States · 1967
- HIGBEE v. COMMISSIONER OF INTERNAL REVENUEUnited States Tax Court · 2001
- Commissioner v. Court Holding Co.Supreme Court of the United States · 1945
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3Cited by8 opinions
- Cullifer v. Comm'rUnited States Tax Court · 2014
- Stuart v. CommissionerUnited States Tax Court · 2015
- Buckrey v. Comm'rUnited States Tax Court · 2017
- John Alterman Trust v. Comm'rUnited States Tax Court · 2015
- Estate of Marshall v. Comm'rUnited States Tax Court · 2016
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