§ 105-239.1. Transferee liability. - North Carolina Statutes

§ 105‑239.1.  Transfereeliability.

(a)        Lien and Liability.– Property transferred for an inadequate consideration to a donee, heir,legatee, devisee, distributee, stockholder of a liquidated corporation, or anyother person at a time when the transferor is insolvent or is renderedinsolvent by reason of the transfer is subject to a lien for any taxes owing bythe transferor to the State of North Carolina at the time of the transferwhether or not the amount of the taxes has been ascertained or assessed at thetime of the transfer. G.S. 105‑241 applies to this tax lien. In the eventthe transferee has disposed of the property so that it cannot be subjected tothe State's tax lien, the transferee is personally liable for the differencebetween the fair market value of the property at the time of the transfer andthe actual consideration, if any, paid to the transferor by the transferee.

(b)        Procedure. – TheDepartment may proceed to enforce a lien that arises under this section againstproperty transferred by a taxpayer to another person or to hold that personliable for the tax due by sending the person a notice of proposed assessment inaccordance with G.S. 105‑241.9. The Department has the burden ofestablishing that a person to whom property was transferred is liable. Theperiod of limitations for assessment of any liability against a transferee orenforcing the lien against the transferred property expires one year after theexpiration of the period of limitations for assessment against the transferor.

(c)        Proceeds. – Whenproperty transferred by a taxpayer to another person is sold to satisfy thelien that arises under this section, the person is entitled to receive from theproceeds of the sale the amount of consideration, if any, the person paid forthe property. The proceeds must be applied for this purpose before they areapplied to satisfy the lien.

(d)        Repealed by SessionLaws 2007‑491, s. 27, effective January 1, 2008. (1957, c. 1340, s. 10; 1973,c. 476, s. 193; 1993, c. 450, s. 11; 2007‑491, s. 27.)