Sec. 111.024. LIABILITY IN FRAUDULENT TRANSFERS. (a) A person who acquires a business or the assets of a business from a taxpayer through a fraudulent transfer or a sham transaction is liable for any tax, penalty, and interest owed by the taxpayer.
(b) A transfer of a business or the assets of a business is considered to be a fraudulent transfer or a sham transaction if the taxpayer made the transfer or undertook the transaction:
(1) with intent to evade, hinder, delay, or prevent the collection of any tax, penalty, or interest owed under this title; or
(2) without receiving a reasonably equivalent value in exchange for the business or business assets subject to the transfer or transaction.
(c) In determining the intent of the taxpayer under Subsection (b)(1), consideration may be given, among other factors, to whether:
(1) the transfer was to a current or former business insider, associate, or employee of the taxpayer or to a person related to the taxpayer within the third degree of consanguinity by blood or marriage;
(2) the transfer was to a third party who subsequently transferred the business or assets of the business to a current or former business insider, associate, or employee of the taxpayer or to a person related to the taxpayer within the third degree of consanguinity by blood or marriage;
(3) the taxpayer retained possession or control of the business or the assets of the business after the transfer or transaction;
(4) the taxpayer's business and the transferee's business are essentially operated as a single business entity at the same location;
(5) before the transfer or the transaction occurred, the taxpayer had either been subjected to or apprised of impending collection action by the comptroller or by the attorney general;
(6) the transfer or transaction was concealed;
(7) the taxpayer was insolvent at the time of the transfer or became insolvent not later than the 31st day after the date the transfer or transaction occurred; or
(8) the transfer or transaction involved all or substantially all of the taxpayer's assets.
(d) This section does not apply to a transfer of a business or the assets of a business:
(1) through a court order on dissolution of a marriage; or
(2) by descent or distribution or testate succession on the death of a taxpayer.
Added by Acts 2001, 77th Leg., ch. 442, Sec. 6, eff. Sept. 1, 2001.
Structure Texas Statutes
Subtitle B - Enforcement and Collection
Chapter 111 - Collection Procedures
Subchapter A. Collection Duties and Powers
Section 111.001. Comptroller to Collect Taxes
Section 111.002. Comptroller's Rules; Compliance; Forfeiture
Section 111.0021. Application to Other Taxes and Fees
Section 111.0022. Application to Other Laws Administered by Comptroller
Section 111.003. Comptroller's Investigations
Section 111.0034. Advanced Database System for Audits
Section 111.0035. Advanced Database System for Tax Collections
Section 111.0036. Out-of-State Audits
Section 111.004. Power to Examine Records and Persons
Section 111.0041. Records; Burden to Produce and Substantiate Claims
Section 111.0042. Sampling in Auditing; Projecting Assessments
Section 111.0043. General Audit and Prehearing Powers
Section 111.0044. Special Procedures for Third-Party Orders and Subpoenas
Section 111.0045. Use of Outside Personnel; Delegation of Powers
Section 111.00452. Employment of Investigators
Section 111.00455. Contested Cases Conducted by State Office of Administrative Hearings
Section 111.00457. Information Relating to Other Permit or License Requirements
Section 111.0046. Permit or License
Section 111.0047. Suspension and Revocation of Permit or License
Section 111.0048. Reissued or New Permit or License After Revocation or Suspension
Section 111.005. Governmental Entities to Cooperate
Section 111.006. Confidentiality of Information
Section 111.007. Criminal Penalties for Disclosing Federal Tax Information
Section 111.0075. Provision of Information Relating to Tax Audits
Section 111.008. Deficiency Determination
Section 111.0081. When Payment Is Required
Section 111.009. Redetermination
Section 111.010. Suit to Recover Taxes
Section 111.0102. Suit Challenging Collection Action
Section 111.011. Tax Collections and Reports by Businesses; Enforcement of Duties
Section 111.012. Security for the Payment of Taxes
Section 111.013. Evidence: Tax Claims
Section 111.014. Evidence: Copies of Graphic Matter
Section 111.015. Remedies Cumulative
Section 111.016. Payment to the State of Tax Collections
Section 111.017. Seizure and Sale of Property
Section 111.018. Notice of Sale of Seized Property
Section 111.019. Sale of Seized Property; Disposition of Proceeds
Section 111.020. Tax Collection on Termination of Business
Section 111.021. Notice to Holders of and Levy Upon Assets Belonging to Delinquent
Section 111.022. Jeopardy Determination
Section 111.023. Written Authorization