In Slone v. Commissioner, the Ninth Circuit held that the former shareholders of a broadcasting company were liable for the company’s taxes. The asset and stock sale lacked economic substance beyond tax avoidance. Also, reasonable actors in the shareholders’ position should have known that the buyer never intended to pay the taxes. Thus, under state (Arizona) fraudulent transfer law they were liable as transferees for the taxes owed.
See full opinion at Slone v. Commissioner.
Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal.
