When assets are transferred for less than fair market value, the Department of Revenue can hold the transferee (recipient) liable for tax debts owed by the transferor (person or business transferring the assets).
We can assess tax, penalty, interest, and other charges to the transferee. This assessment will not exceed the fair market value of the assets unless the transferee assumed liability in the transfer. In that case, we can assess the full amount of the debt, regardless of the value of the assets. (See Minnesota Statutes, section 270C.58.)
What tax types can we assess?
We can also assess transferees when the:
- Transferee is a continuation of the transferor business
- Transaction is a consolidation or a merger
Transaction leaves the transferor with no assets to pay tax debts
Who else can we assess for tax debts?
In addition to the transferee, we can assess:
- Personal representatives
- Guardians and others permitted by law to act for the person
- Trustees, receivers, assignees, or other conservators