Opinion ID: 415638
Heading Depth: 2
Heading Rank: 2

Heading: Security's Transferee Liability

Text: 74 Security finally presses two additional bases for its position that it is not liable for any additional tax owed by Southern and Standard as a result of the inclusion of their policyholders surplus accounts in income. First, Security contends that it is not a transferee of Southern or Standard within the meaning of section 6901 and therefore was not the proper party against whom any transferee liability should have been assessed. Second, Security claims that the undated transferee liability forms purporting to impose such liability upon Security were executed after the statute of limitations had expired and consequently are invalid. We cannot agree with either of these contentions. 75 Security's attempt to deny transferee status in this case 16 is disingenuous at best. Ourso, as president of Security, executed two transferee agreements on revised Internal Revenue Service Forms 2045 in consideration of the IRS not making assessments of deficiency against OIC. In the transferee agreements, Security admitted that it was the transferee of assets from Southern and Security by way of OIC; furthermore, Security assumed and agreed to pay any federal income tax determined to be owed by Southern for 1970 and Security for 1971. Security is bound by these transferee agreements and may not now renounce its assumptions of transferee liability. It is as clear as words can make it that Security assumed Southern's and Standard's tax liability, and Security is estopped from contending otherwise. Turnbull, Inc. v. Commissioner, 373 F.2d 91, 94 (5th Cir.1967); see also West Texas Refining & Development Co. v. Commissioner, 68 F.2d 77, 81 (10th Cir.1933). 76 Finally, we reject Security's suggestion that the undated transferee agreements are invalid because they were executed after the statute of limitations had expired. 17 The running of the statute of limitations is an affirmative defense that may be raised by a transferee to defeat transferee liability, 9 J. Mertens, supra, Sec. 53.47 (citing cases), and the party asserting the bar of the statute of limitations has the burden of proof on that issue. Id. At trial, the IRS agent involved in the matter testified that he mailed the transferee agreements to Ourso on March 22, 1973, and that they were executed and returned to him before April 10, 1973. Record on Appeal, Vol. III at 278-79. The only other testimony on point was offered by Ourso himself. At first, Ourso had no recollection of the date the documents were signed. Id. at 96-97. Later, however, in response to his counsel's leading question, he related the date of his signing of the transferee liability documents to the date of the actual payment of the deficiencies, in the fall of 1975. Id. at 316. Ourso's testimony is far too tenuous to satisfy Security's burden of establishing a statute of limitations defense, particularly in light of the government's evidence to the contrary. Accordingly, we conclude that Security has failed to carry its burden of proof on the statute of limitations defense. We hold, therefore, that Security, as transferee of Southern and Standard, is liable for the tax deficiencies assessed in connection with the inclusion of the policyholders surplus accounts in income.