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Media & Articles

Jim Malone Examines Ninth Circuit Decision Involving Transferee Liability for Law360


In the August 1, 2018 Law360 article, "9th Circ. Slone Ruling Considers Basis Of Transferee Liability," Tax Controversy Principal James R. Malone, Jr. examines a Ninth Circuit decision in Norma L. Slone et al. v. Commissioner of Internal Revenue. He notes that the case bares analysis as, "it illustrates the important role that transferee liability plays in civil tax enforcement and it also illustrates the willingness of courts to focus on substance, not form, in transferee cases."

Mr. Malone goes on the explain:

"The main significance of Slone is on the question of liability under state law. In several cases, the IRS attempted to apply state fraudulent transfer law to a transaction after it had been recast using federal tax law principles. That position was rejected in a series of appellate cases that began with Starnes v. Commissioner. Accordingly, the courts have forced the IRS to demonstrate that equitable principles of applicable state law support the recharacterization of a transaction as a prelude to establishing a fraudulent transfer."

Click here for full article.