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Last Updated: 7/28/2017

Transferee Assessment

When assets are transferred for less than fair market value, we can hold the recipient (transferee) liable for tax debts owed by the person or business transferring the assets (transferor).

We can assess tax, penalty, interest, and other charges on the transferee. This assessment will not exceed the fair market value of the assets unless the transferee assumed liability in the transfer. If the transferee assumed liability, we can assess the full amount of the debt, regardless of the value of the assets.

(See Minnesota Statutes, section 270C.58.)

We can also assess transferees in these other situations: 

  • The transferee is a continuation of the transferor business.
  • The transaction is either a consolidation or a merger.
  • The transaction leaves the transferor with no assets to pay tax debts.

Who else can we assess for the tax debts? 

In addition to the transferee, we can assess:

  • personal representatives
  • fiduciaries
  • guardians and others authorized or permitted by law to act for the person
  • trustees, receivers, assignees, or other conservators

How long do we have to assess and collect from transferees? 

The time we have to access and collect the debt varies, depending on who we are collecting from, as shown in the table below. 

Who are we Assessing?

How long do we have to assess?

​How long do we have to collect?

​Initial Transferee

Up to 1 year after the time limit expires to assess the transferor

Up to 1 year after the time limit expires to collect the debt from the transferor

​Subsequent Transferee

Up to 1 year after the time limit expires to assess the preceding transferee

No more than 3 1/2 years after the time limit expires to assess the original debtor

​Up to 1 year after the time limit expires to collect from the preceding transferee

No more than 4 years after the time limit expires to collect from the original debtor

We may include income taxes – personal and business – and withholding taxes in the assessment. However, we may not include sales taxes. (See Minnesota Statutes, Chapter 290.)