Transferees Beware: Statute Of Limitations Extended

On January 19, 2021, in United States v. Henco Holding Corp.,¹ the Eleventh Circuit reversed and remanded a district court decision that had granted taxpayers' motion to dismiss the Government's transferee claims because the Government had failed to timely assess tax liabilities under § 6501 against four defendants as transferees. The Eleventh Circuit held that the Government was not required to separately assess the defendants as transferees under § 6901 and that its transferee-liability suit was not barred under § 6501. Thus, the court held that the Government could timely assert transferee liability under state law without satisfying the requirements of §§ 6501 and 6901, so long as the IRS filed suit to collect the tax from the transferees within the ten-year limitation period under § 6502 after making an assessment against the transferor.