United States Second Circuit

The Tax Court's decision holding that petitioner could not be held liable as a transferee of a transferee under 26 U.S.C. section 6901 is vacated and remanded, where: 1) the standard of review for mixed questions of law and fact in a case on review from the Tax Court is de novo to the extent that the alleged error is in the misunderstanding of a legal standard and clear error to the extent the alleged error is in a factual determination; 2) the two requirements of 26 U.S.C. section 6901, transferee status and liability, are separate and independent inquiries, a procedural one governed by federal law and a substantive one governed by state law; 3) under the New York Uniform Fraudulent Conveyance Act, the applicable state statute, the series of transactions collapses based upon the constructive knowledge of the parties involved; and therefore, 4) the matter is remanded to the Tax Court to determine in the first instance whether petitioner is a transferee of a transferee under section 6901 and whether the three-year or six-year statute of limitations is applicable.

Appellate Information

• Decided 11/14/2013
• Published 11/14/2013

Judges

• POOLER,

Court

• United States Second Circuit

Counsel