“Knowledge itself is power,” in its various forms, is a familiar phrase attributed to Sir Francis Bacon. However, in some cases, a lack of knowledge can be just as powerful. On June 13, 2016, the Tax Court again ruled that shareholders were not liable under a transferee liability theory for the taxes generated from a sale of their company’s assets, followed by a sale of all of the company’s stock. The shareholders’ lack of knowledge of the grand tax scheme was an important factor that saved them from a grand tax bill.
Internal Revenue Code §6901 provides for transferee liability on …read more
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