Academic journal article Journal of Accountancy

Son Liable for Father's Unpaid Taxes

Academic journal article Journal of Accountancy

Son Liable for Father's Unpaid Taxes

Article excerpt

The Tax Court affirmed an IRS determination that a son is liable for his father's unpaid taxes as the transferee of his father's Florida condominium. Florida's Uniform Fraudulent Transfer Act (FUFTA) did not protect the son from the liability.

When his mother's health declined in 1989, Scott Rubenstein moved from New Jersey to Florida to live with his parents. After his mother's death, Rubenstein remained in Florida to care for his father, Jerry Rubenstein. In March 2002, Jerry Rubenstein purchased a condo in which they lived and nine months later transferred the condo to Scott Rubenstein for $10 and "other good and valuable consideration." The fair market value of the condo was $41,000 at the date of transfer.

At that time, Scott Rubenstein knew that his father was insolvent and unable to pay his debts, which included $112,420 owed to the IRS for unpaid taxes, penalties and interest related to tax years 1994-2002. Eighteen months later, the IRS filed a notice of federal tax lien against the condo related to those unpaid taxes.

[GRAPHIC OMITTED]

IRC [section] 6901(a) provides that the liability of a transferee of a taxpayer's property may be "assessed, paid, and collected in the same manner and subject to the same provisions and limitations as in the case of the taxes with respect to which the liabilities were incurred." The IRS argued that Scott Rubenstein was liable as a transferee under the FUFTA, which parallels the Uniform Fraudulent Transfer Act that has been adopted by most states. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.