Texas Comptroller Finds Taxpayer Fraudulently Acquired Predecessor Company, Affirms Sales, Franchise Tax Assessments Against Taxpayer

The Texas Comptroller of Public Accounts March 9 affirmed sales and use and corporate income tax assessments against Taxpayer. A company had sales and franchise tax liabilities and filed for bankruptcy. The company’s president formed Taxpayer. The Tax Division assessed Taxpayer for the company’s outstanding liabilities on grounds Taxpayer acquired the company through a fraudulent transfer. Taxpayer contended that it wasn’t responsible for the company’s debt because it didn’t acquire its business or assets from it. The Administrative Law Judge (ALJ) noted: 1) Taxpayer was liable for the company’s taxes because the transfer of its assets to Taxpayer without consideration ...