Sample Form 1296, Assessment Against Transferee or Fiduciary. The box is checked showing type of tax as income. The transferor’s name, address, and TIN are listed on the left side of the form. The transferee’s name, address, and TIN are listed on the right side of the form. The tax year is listed as 199512, and the code section is 6901(a)(1). The transferee’s tax is listed as $35,000 as is the total tax. The transferor’s tax total is listed as $0.00. The remarks indicate that the transferee liability is limited to the value of assets received in the total amount of $35,000.

Attachment to Form 1296 - Transferee with Limited Liability – Multiple Years. The transferor name, address, and TIN are listed at the top of the statement. A table showing the tax periods ended 1995 through 1998 and the tax, and additions to tax are listed. The total tax is $58,417.13 and additions to tax total $28,151.31. Below the table, the name, address and TIN of the transferee are listed as is the income tax liability of the transferee of $35,000. In the remarks section, it is noted that transferee liability is limited to the value of assets received in the total amount of $35,000. A note indicating the interest rate and terms is listed.

Notice of Liability Statement - Full Liability for Unpaid Deficiency of Transferor. The statement would be altered to fit the type of tax for transferee cases involving types of tax other than income tax. The statement shows the income tax deficiency (tax and penalty) of the transferor. Below that is the liability of the transferee which is identical to the liability listed of the transferor.

Notice of Liability Statement- Limited Liability for Unpaid Deficiency of Transferor. If more than one year is involved in this example, show the transferee liability as one figure and do not allocate it to the various years. The statement shows two tax periods with a total of $13,000 in income tax deficiency and $2,600 in penalties. For the transferee, the income tax liability is listed as $9,000 and accordingly, the transferee’s liability is limited to that amount.

Notice of Liability Statement - Full Liability for Unpaid Tax of Transferor. In the example, the income tax liability of the corporate transferor is limited to $25,000. The liability of the individual taxpayer as the transferee of assets of the corporation for unpaid income tax due from the corporation is $25,000.

Notice of Liability Statement - Limited Liability for Unpaid Original Tax of Transferor. The tax liability is shown as one figure and is not allocated to the various years. In this example, the corporate transferor has an income tax liability of $25,000 over two tax years. The transferee liability is limited to $20,000, the value of the assets received by the transferee.

Notice of Liability Statement - Transferee of Assets of a Corporation. The transferor, a company that has since dissolved, has a $16,500 income tax liability. The assets were transferred to an individual taxpayer. The $16,500 is the individual taxpayer’s liability as transferee of assets of the company for a deficiency in income tax due from the company for the tax year shown.

Notice of Liability Statement - Transferee of Assets of a Deceased Taxpayer. This case involves full liability for an unpaid income tax deficiency of the transferor. The individual taxpayer transferee is fully liable for the assets of the decedent’s estate, that were transferred to the individual taxpayer.

Notice of Liability Statement - Deceased Transferee. This is an example of how to prepare the Notice of Liability statement to be attached to the transferee letter addressed to the decedent’s estate for the liability of the decedent incurred prior to the date of his death as a transferee of the assets of a corporation. The example shows the transferor has a $12,300 income tax liability. The transferee is the estate of a deceased taxpayer. The corporation, since dissolved, transferred assets to the taxpayer and payment of an income tax liability of $12,300 for the tax year shown is due from the corporation. The liability was incurred by the taxpayer during his lifetime as a transferee of the corporation.

Notice of Liability Statement - Transferee of a Transferee. The example shows how to prepare the Notice of Liability (NOL) statement for the transferee of a transferee of assets of a corporation. The example involves full liability for an unpaid deficiency of the transferor. ABCD Company was the transferor, and EFGH Corp. was the original transferee. EFGH Corp. was dissolved and Richard Robin received assets of EFGH Corp. EFGH Corp. is the first transferee and Richard Robin is the second transferee. The NOL is addressed to Richard Robin. The income tax liability of the ABCD Co. was $24,000. Richard Robin’s liability is $24,000 as transferee of assets of EFGH Corp, transferee of assets of the ABCD Co. for the income tax deficiency due from ABCD Co. for the tax year shown.

Notice of Liability Statement - Trustees. The example shows how to prepare a NOL statement for trustees of a decedent’s estate where the duly qualified executors or administrators have been discharged and they or others have been trustees. This case involves full liability for an unpaid deficiency of the transferor. The $22,100 income tax liability of the transferor estate is also the liability of the trust created under the will of the deceased as transferee of assets of his estate for a deficiency in income tax due from him or his estate for the tax year shown.

Notice of Liability Statement - Fiduciary with Personal Liability - Income Tax. This is an example of how to prepare the NOL statement to be attached to the transferee letter, addressed to a fiduciary who incurred personal liability for payment of the tax of an estate under 31 USC 3713(b) for making payments/distributions to other creditors prior to satisfying the Service’s claim for the unpaid taxes. The estate had a $15,000 income tax liability. The fiduciary is personally liable under 31 USC 3713(b), for a deficiency of income tax due from the estate, for the tax year shown.

Notice of Liability Statement Fiduciary with Personal Liability - Estate Tax Return. This example shows how to prepare the NOL statement to be attached to the estate tax transferee letter addressed to a fiduciary who has incurred personal liability for payment of the estate tax of an estate under 31 USC 3713(b), for making payments/distributions to other creditors prior to satisfying the Service’s claim for the unpaid taxes. This is a format for a fiduciary with personal liability when an estate tax return has been filed. In the example, the estate tax is $15,000. The fiduciary is personally liable for the $15,000 unpaid estate tax to the extent of payments/distributions made to other creditors.

Notice of Liability Statement - Transferee received property after decedent's death. This example shows how to prepare the NOL statement to attach to the estate tax transferee letter addressed to a transferee of property received from an estate after a decedent’s death. $19,280 of the estate of the deceased was transferred to the transferee. The liability of the estate for estate tax has not been discharged. $19,280 is their liability as a transferee of property of the estate. The transferee’s liability does not exceed the value of the property received.

Notice of Liability Statement Transferee received property before the decedent's death. This is an example of how to prepare the NOL statement to be attached to the estate tax transferee letter addressed to a transferee of property transferred by the decedent during his/her life, or insurance, powers of appointment, and jointly owned property with right of survivorship. In the example, the estate tax was $22,000. The trustee/transferee, or insurance beneficiary/transferee, liability is $22,000 as it was determined that property included in the gross estate of the decedent for the purpose of estate tax was transferred to or received by the transferee and that the liability of the estate tax had not been discharged.

Notice of Liability Statement Transferee received property before the decedent's death, page 2. This example is a continuation of the above statement and includes additional paragraphs to include where the transferee received property before the decedent’s death. The second paragraph options include: Liability as transferee and trustee or property under a trust created by the decedent of which you are a trustee, orThe amount is your liability as transferee and trustee of insurance upon the life of the deceased. The insurance proceeds are being paid to a designated beneficiary, orThe amount is your liability as a transferee of property from the decedent during his lifetime and also from the estate at or after his deathThe third paragraph to include on the statement, if appropriate, is the following: The estate tax return filed by the executor on Form 706 has been verified as filed except as follows.

Notice of Liability Statement - Transferee of Property as a Gift. This example shows how to prepare the NOL statement to be attached to the gift tax transferee letter addressed to a transferee of property from an individual as a gift. The donor’s gift tax is $3,750. The transferee’s liability is $3,750 because the donor transferred property to the transferee as a gift and the gift tax liability has not been paid.

Notice of Liability Statement Fiduciary with Personal Liability - Gift Tax Return. This example shows how to prepare the NOL statement to be attached to the gift tax transferee letter addressed to a fiduciary who has incurred personal liability for payment of the gift tax of a deceased donor under 31 USC 3713(b), through failure to observe the priority of the U.S. This is a format for a fiduciary with personal liability when a gift tax return has been filed. The statement should include a paragraph, if appropriate, that the gift tax return by the donor (executor) on Form 709 has been verified as filed except as noted.

Notice of Liability Statement - Trustee & Transferee Received Property as a Gift. This example shows how to prepare the NOL statement to be attached to a gift tax transferee letter addressed to a trustee as transferee of property received from an individual as a gift in trust for the benefit of others. The statement should include a paragraph, if appropriate, that the gift tax return by the donor (executor) on Form 709 has been verified as filed except as noted.

Notice of Transferee or Fiduciary Liability. The first page of Letter 3424, Notice of Transferee or Fiduciary Liability, is shown. It is addressed to the transferee and shows they are fully liable as transferee for the amount of unpaid taxes not exceeding the value of the assets received from the transferor taxpayer.

Form 870-T. This is a completed example of the form and shows the transferee’s liability related to assets received from the transferor. The transferee is liable for thefull amount of unpaid taxes and penalties, not to exceed the value of the assets received from the transferor.

Form 870-T, page 2

Notice of Liability Statement. This is an example of the NOL statement showing an income tax deficiency of the transferor. The transferee is now liable as transferee of the transferor’s assets for deficiencies in income tax and penalties due from the transferor for the tax years shown.

Statement - Income Tax Changes. This is an example of Form 5278 showing the adjustments to the transferor’s income and the resulting balance due including penalties. The form and related tax schedules are attached to the notice of liability of the transferee and are only necessary if the notice involves deficiencies (not unpaid original tax) of the transferor.

Notice of Transferee or Fiduciary Liability letter. This is an example of Letter 3424 showing transferor John Pelican with an income tax deficiency of $6,832 and $6,959, for 2000 and 2001 tax years, respectively, and accuracy penalties of $1,366 and $1,392, respectively. The notice shows $10,000 of this deficiency is the liability of Robert Robin, as transferee of assets of John Pelican.

Form 870-T. The form is completed with the tax and penalties as indicated on the Notice of Transferee Liability. The remarks show that only $10,000 of the amount of the deficiency represents the transferee’s liability as transferee of assets.

Form 870-T, page 2

Notice of Liability Statement. This is an NOL statement showing transferor’s income tax deficiency of $13,791 and accuracy penalties of $2,758. The transferee’s liability for the income tax is $10,000 as these assets were transferred to him. Since the value of the assets the transferee received amounted to $10,000, his liability as a transferee is limited to that amount.