Stansbury v. Comm'r of Internal Revenue, s. 7025-92

• Citation: 104 T.C. No. 24,104 T.C. 486
• Decision Date: 18 April 1995
• Docket Number: Nos. 7025-92,7026-92.,s. 7025-92
• Parties: Doris E. STANSBURY, Transferee, Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent.Leland D. STANSBURY, Transferee, Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent.
• Court: United States Tax Court

104 T.C. 486
104 T.C. No. 24

Doris E. STANSBURY, Transferee, Petitioner,
v.
COMMISSIONER OF INTERNAL REVENUE, Respondent.Leland D. STANSBURY, Transferee, Petitioner,
v.
COMMISSIONER OF INTERNAL REVENUE, Respondent.

Nos. 7025-92

7026-92.

United States Tax Court.

April 18, 1995.

[104 T.C. 487]

Randall M. Willard, for petitioners.

Bruce A. Anderson, Cynthia J. Olson, and Thomas J. Kane, for respondent.

[104 T.C. 486]

Ps were officers and 100-percent owners of ABC corporation. After ABC agreed to the assessment and collection of taxes and additions to tax owed by ABC, but prior to payment thereof, all of ABC's remaining assets were transferred to Ps and ABC was dissolved. Ps agree that they are liable as transferees to the extent of the value of the assets received from ABC and that they are liable for interest under sec. 6601, I.R.C., from the date they received notices of transferee liability. Ps argue, however, that they are not liable, under either Federal or State law, for interest prior to the date of the notices.

Held: Ps' liability for interest for the period prior to the issuance of the notices of transferee liability is to be determined under State law. Held, further, Ps are liable for interest at the statutory rate provided in Colorado from the date of the transfers to the date the notices of transferee liability were sent.

GERBER, Judge:

Respondent, by means of separate notices of transferee liability, determined that petitioners Doris E. Stansbury and Leland D. Stansbury are liable as transferees of property from ABC Real Estate, Inc. (hereinafter referred to as ABC or transferor), for the following deficiencies in income tax and additions to tax:¹

+-------------------------------------------------------------+
                ¦Additions to Tax ¦
                +-------------------------------------------------------------¦
                ¦ ¦ ¦Sec. ¦Sec. ¦Sec. ¦Sec. ¦Accrued of¦
                +----+----------+----------+-------+-------+-------+----------¦
                ¦Year¦Deficiency¦6651(a)(1)¦6653(a)¦6655 ¦6661(a)¦Interest ¦
                +----+----------+----------+-------+-------+-------+----------¦
                ¦1980¦$ 7,227 ¦$1,806.75 ¦$361.35¦$418.65¦--- ¦$18,305.60¦
                +----+----------+----------+-------+-------+-------+----------¦
                ¦1981¦11,490 ¦2,872.50 ¦574.50 ¦749.95 ¦--- ¦25,339.66 ¦
                +----+----------+----------+-------+-------+-------+----------¦
                ¦1982¦5,330 ¦1,332.50 ¦266.50 ¦478.28 ¦ ¦9,173.02 ¦
                +----+----------+----------+-------+-------+-------+----------¦
                ¦1983¦14,996 ¦3,749.00 ¦749.80 ¦934.83 ¦$1,500 ¦23,119.19 ¦
                +----+----------+----------+-------+-------+-------+----------¦
                ¦1984¦2,741 ¦685.25 ¦137.05 ¦--- ¦--- ¦3,186.49 ¦
                +-------------------------------------------------------------+
                

Unless otherwise indicated, all section references are to the Internal Revenue Code in effect for the years involved herein, and all Rule references are to this Court's Rules of Practice and Procedure.

Respondent also determined that petitioners' liability as transferees is limited to the value of the assets received from ABC plus interest applicable thereon.

The parties have agreed that petitioners are liable as transferees, that the values of the assets transferred to Mrs. Stansbury and Mr. Stansbury were $50,000 and $25,000, respectively, and that these amounts are less than the tax liability of the transferor. On brief, petitioners have conceded that they are liable for interest pursuant to section 6601 from the date of the notices of transferee liability. The remaining issue is whether petitioners are liable for interest for the period prior to the issuance of the notices of transferee liability.

[104 T.C. 488]

FINDINGS OF FACT²

Petitioners, who were married at all relevant times, resided in Fort Collins, Colorado, at the time their petitions were filed. ABC was incorporated under the laws of the State of Colorado on or about October 10, 1973, for the purpose of purchasing and selling real estate. Petitioners owned 100 percent of ABC's stock. Mr. Stansbury and Mrs. Stansbury were president and secretary-treasurer of ABC, respectively, and they also served, along with Victoria Hays, as directors of the company.

Petitioners conducted real estate activities by and through ABC from at least 1973, including the purchase, on or about December 20, 1973, of 47 residential lots known as the Pleasant Acres Subdivision in Larimer County, Fort Collins, Colorado.

On or about November 1981, the Internal Revenue Service (IRS) commenced an examination of ABC's 1979 through 1981 taxable years. No returns had been filed for 1979, 1980, or 1981. The examination of ABC was later expanded to include the taxable years 1982 through 1984.

Sometime prior to March 1986, as a result of its continuing investigation of ABC, the IRS determined that ABC was liable for income tax deficiencies and additions to tax for the years 1980 through 1984. In March 1986, ABC, through its president Mr. Stansbury, agreed to the assessment and collection of tax and penalties determined by the IRS by executing Forms 4549 for the years 1980 through 1984, as follows:

+--------------------------------+
                ¦Year¦Adjustment to Tax¦Penalties¦
                +----+-----------------+---------¦
                ¦1980¦$ 7,227 ¦$2,586.75¦
                +----+-----------------+---------¦
                ¦1981¦11,490 ¦4,196.95 ¦
                +----+-----------------+---------¦
                ¦1982¦5,330 ¦2,077.28 ¦
                +----+-----------------+---------¦
                ¦1983¦14,996 ¦6,933.63 ¦
                +----+-----------------+---------¦
                ¦1984¦2,741 ¦685.25 ¦
                +--------------------------------+
                

The liabilities set forth in the Forms 4549 were assessed on June 30, 1986; however, payments by ABC were not forthcoming. On or about October 20, 1986, still having failed to make payments to the IRS on its agreed tax liabilities, ABC, through its president Mr. Stansbury, made the following

[104 T.C. 489]

transfers of residential property from the company's remaining holdings in the Pleasant Acres subdivision:

+--------------------------------------------------------+
                ¦Property Location¦Transferee(s) ¦
                +-----------------+--------------------------------------¦
                ¦ ¦ ¦
                +-----------------+--------------------------------------¦
                ¦604 Riverbend Dr.¦Doris E. Stansbury ¦
                +-----------------+--------------------------------------¦
                ¦713 Riverbend Dr.¦Leland D. Stansbury/Doris E. Stansbury¦
                +-----------------+--------------------------------------¦
                ¦716 Riverbend Dr.¦Doris E. Stansbury ¦
                +-----------------+--------------------------------------¦
                ¦713 Rene Dr. ¦Doris E. Stansbury ¦
                +-----------------+--------------------------------------¦
                ¦736 Rene Dr. ¦Doris E. Stansbury ¦
                +-----------------+--------------------------------------¦
                ¦737 Rene Dr. ¦Betty M. Stansbury1 ¦
                +--------------------------------------------------------+
                

On December 3 and 4, 1986, the IRS filed separate Notices of Federal Tax Lien...