                                               SCOTT E. RUBENSTEIN, TRANSFEREE, PETITIONER v.
                                                    COMMISSIONER OF INTERNAL REVENUE,
                                                               RESPONDENT
                                                        Docket No. 1254–06.                            Filed June 7, 2010.

                                                  For many years P has lived with and cared for his father
                                               in Florida. In 2003 P’s father, who was insolvent and had
                                               substantial unpaid income tax liabilities, transferred to P, for
                                               little or no consideration, the condominium in which they both
                                               resided. The IRS had previously determined, for purposes of
                                               calculating his reasonable collection potential, that P’s father

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                                               had zero net equity value in the condominium. After the
                                               transfer R determined that pursuant to sec. 6901, I.R.C., P
                                               has transferee liability equal to the condominium’s fair
                                               market value as of the date of the transfer. R contends that
                                               the transfer was constructively fraudulent under Florida’s
                                               Uniform Fraudulent Transfer Act (FUFTA), which applies to
                                               certain transfers of ‘‘assets’’, defined in Fla. Stat. Ann. sec.
                                               726.106(2)(b) (West 2000) to exclude property that is ‘‘gen-
                                               erally exempt under nonbankruptcy law’’. P asserts and R
                                               does not deny that under Florida law the condominium was
                                               his father’s exempt homestead property. Consequently, P
                                               argues, because the condominium was ‘‘generally exempt
                                               under nonbankruptcy law’’, it is not an ‘‘asset’’ for purposes of
                                               the FUFTA and its transfer to P is not avoidable under the
                                               FUFTA. Held: As to the United States, homestead property is
                                               not ‘‘generally exempt under nonbankruptcy law’’ within the
                                               meaning of the FUFTA because it is reachable by the United
                                               States through judicial process to enforce collection of unpaid
                                               income tax liabilities; the condominium constitutes an ‘‘asset’’
                                               for purposes of R’s claim under the FUFTA. Held, further, the
                                               care that P provided for his father did not constitute ‘‘reason-
                                               ably equivalent value’’ for the condominium within the
                                               meaning of the FUFTA, and the transfer was constructively
                                               fraudulent thereunder. Held, further, R is not equitably
                                               estopped from asserting transferee liability under sec. 6901,
                                               I.R.C., by virtue of having previously determined that the con-
                                               dominium had zero net equity value as to P’s father for pur-
                                               poses of calculating his reasonable collection potential.

                                           Scott E. Rubenstein, pro se.
                                           Timothy Sloane and Sergio Garcia-Pages, for respondent.
                                         THORNTON, Judge: Respondent determined that pursuant
                                      to section 6901 petitioner has transferee liability of $44,681,
                                      plus interest as provided by law, arising from his father’s
                                      transfer to him of a Florida condominium. 1 Petitioner
                                      contends and respondent does not appear to dispute that the
                                      condominium qualified for homestead exemption under
                                      Florida law. The issues for decision are: (1) Whether
                                      the transfer was constructively fraudulent pursuant to sec-
                                      tion 726.106(1) or (2) of Florida’s Uniform Fraudulent
                                      Transfer Act (FUFTA), codified at Fla. Stat. Ann. secs. 726.101
                                      to 726.112 (West 2000); and (2) whether respondent is equi-
                                        1 Unless otherwise indicated, all section references are to the Internal Revenue Code, and all

                                      Rule references are to the Tax Court Rules of Practice and Procedure. All figures have been
                                      rounded to the nearest dollar.




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                                      tably estopped from asserting transferee liability against
                                      petitioner.

                                                                          FINDINGS OF FACT

                                       The parties have stipulated some facts, which we so find.
                                      When he petitioned the Court, petitioner resided in Florida.
                                      Petitioner’s Care for His Father
                                         In 1989, with his mother’s health in decline, petitioner
                                      moved from his home in New Jersey to live with his parents
                                      in Florida. In 1993 his mother passed away. Since then, peti-
                                      tioner has continued to live with his father, Jerry
                                      Rubenstein, in Florida. While living with his father, peti-
                                      tioner has provided care for him. They have had no under-
                                      standing or agreement that petitioner would be compensated
                                      for these services. Instead, petitioner has been motivated to
                                      care for his father by love, honor, respect, and devotion. Peti-
                                      tioner has never been a licensed caregiver or engaged in
                                      business as a caregiver for profit.
                                      The Condominium
                                         In March 2002 Jerry Rubenstein purchased for $35,000 a
                                      condominium in Delray Beach, Florida (the condominium).
                                      He and petitioner have since resided there together. On Feb-
                                      ruary 21, 2003, Jerry Rubenstein transferred the condo-
                                      minium to petitioner by warranty deed for stated consider-
                                      ation of $10 and ‘‘other good and valuable consideration’’.
                                      That same day, petitioner recorded the warranty deed with
                                      the Clerk and the Comptroller of Palm Beach County,
                                      Florida. The fair market value of the condominium was then
                                      $41,000, and there were no liens or other encumbrances on
                                      the condominium (without consideration of any Federal tax
                                      lien). On July 22, 2004, petitioner mortgaged the condo-
                                      minium to secure a revolving credit agreement with a bank.
                                      Jerry Rubenstein’s Financial Circumstances and Tax
                                      Liabilities
                                        As of February 21, 2003—the day he transferred the condo-
                                      minium to petitioner—Jerry Rubenstein was insolvent and
                                      unable to pay his debts. Petitioner was aware of this fact.
                                      Jerry Rubenstein’s debts included $112,420 that he owed the




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                                      United States for unpaid Federal income taxes, penalties,
                                      and interest for his taxable years 1994 through 2002. 2
                                        On May 13, 2002, Jerry Rubenstein had submitted to the
                                      Internal Revenue Service (IRS) an offer-in-compromise of
                                      $10,000 to settle his income tax liabilities for taxable years
                                      1994 through 2001. By letter dated November 8, 2002, the
                                      IRS had rejected his offer-in-compromise on the ground that
                                      the amount offered was less than his reasonable collection
                                      potential (RCP) of $34,475. According to an asset/equity table
                                      attached to the rejection letter, in calculating Jerry
                                      Rubenstein’s RCP the IRS had determined that his ‘‘Net
                                      Realizable Equity’’ in the condominium was zero. 3
                                        On September 29, 2004—some 18 months after Jerry
                                      Rubenstein had transferred the condominium to petitioner—
                                      the IRS filed, for the first time, a notice of Federal tax lien
                                      with respect to Jerry Rubenstein’s unpaid assessments for
                                      income taxes, penalties, and interest for the years 1994
                                      through 2002.
                                      Notice of Transferee Liability
                                        By notice dated October 17, 2005, the IRS determined that
                                      petitioner had liability of $44,681, plus interest as provided
                                      by law, as Jerry Rubenstein’s transferee of the condominium,
                                      with respect to Jerry Rubenstein’s unpaid income tax, pen-
                                      alties, and interest for taxable years 1998 through 2002.

                                                                                  OPINION

                                      A. Transferee Liability
                                        Respondent contends that pursuant to section 6901(a),
                                      petitioner, as the transferee of the condominium from his
                                      father, is liable for $41,000 plus ‘‘statutory interest’’ for
                                        2 In making this finding of fact, we have adhered to the parties’ stipulation as to Jerry

                                      Rubenstein’s accrued tax debts. It might be argued that Jerry Rubenstein’s tax debt for 2002
                                      accrued no earlier than Apr. 15, 2003, the due date of his 2002 income tax return. See Roland
                                      v. United States, 838 F.2d 1400, 1403 (5th Cir. 1988). Petitioner, however, has made no such
                                      argument. In any event, any such argument would not avail petitioner since Jerry Rubenstein’s
                                      tax debts for years before 2002, as accrued on the date of the transfer, appear to exceed the
                                      condominium’s value as of that date.
                                        3 The table lists ‘‘Real Estate’’ with a fair market value of $41,000 and ‘‘Quick Sale Value’’

                                      of 80 percent of this amount, i.e., $32,800, offset by $32,800 of ‘‘Encumbrances or Exemptions’’,
                                      to arrive at net realizable equity in the real estate of zero. The parties appear to agree that
                                      the real estate referenced in this table is Jerry Rubenstein’s condominium that he later trans-
                                      ferred to petitioner.




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                                      unpaid tax liabilities, penalties, and interest owed by his
                                      father. 4
                                           1. Section 6901
                                        Section 6901(a) provides that the liability of a transferee of
                                      a taxpayer’s property may be ‘‘assessed, paid, and collected
                                      in the same manner and subject to the same provisions and
                                      limitations as in the case of the taxes with respect to which
                                      the liabilities were incurred’’. Section 6901(a) does not create
                                      or define a substantive liability but merely provides the
                                      Commissioner a procedure to assess and collect from the
                                      transferee of property the transferor’s existing liability. See
                                      Commissioner v. Stern, 357 U.S. 39, 42 (1958) (discussing
                                      statutory predecessor of section 6901). For purposes of this
                                      case, the existence and extent of the transferee’s liability are
                                      determined by the law of the State in which the transfer
                                      occurred; i.e., Florida. 5 See id. at 45; Sawyer Trust v.
                                      Commissioner, 133 T.C. 60, 73 (2009). Respondent bears the
                                      burden to prove that petitioner is liable as Jerry
                                      Rubenstein’s transferee but not to show that Jerry
                                      Rubenstein is liable for tax. See sec. 6902(a); Rule 142(d).
                                           2. Florida Uniform Fraudulent Transfer Act
                                         Respondent argues that petitioner is liable as a transferee
                                      under Fla. Stat. Ann. sec. 726.106, which is identical to sec-
                                      tion 5 of the Uniform Fraudulent Transfer Act (UFTA). When
                                      certain conditions are met, these provisions treat a ‘‘transfer’’
                                      by an insolvent debtor as constructively fraudulent; i.e., with-
                                      out regard to the actual intent of the parties. 6 The FUFTA,
                                        4 This assertion apparently reflects the parties’ stipulation that the fair market value of the

                                      condominium on Feb. 21, 2003, was $41,000. Implicitly, then, notwithstanding that respondent’s
                                      brief concludes by urging us to sustain his determination, respondent concedes that the notice
                                      of transferee liability was in error insofar as it asserted petitioner’s transferee liability to exceed
                                      $41,000 plus ‘‘statutory interest’’. Respondent has not explained whether by ‘‘statutory interest’’
                                      he means anything other than interest at the underpayment rate of sec. 6621, accumulating on
                                      the principal of $41,000 from the date of transferee liability. See infra note 18.
                                        5 In some situations Federal law determines the existence and extent of transferee liability.

                                      See, e.g., sec. 6324(a)(2), (b).
                                        6 Fla. Stat. Ann. sec. 726.106 (West 2000) provides:


                                      Transfers fraudulent as to present creditors
                                        (1) A transfer made or obligation incurred by a debtor is fraudulent as to a creditor whose
                                      claim arose before the transfer was made or the obligation was incurred if the debtor made the
                                      transfer or incurred the obligation without receiving a reasonably equivalent value in exchange
                                      for the transfer or obligation and the debtor was insolvent at that time or the debtor became
                                      insolvent as a result of the transfer or obligation.




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                                      like the UFTA, defines a ‘‘transfer’’ as a mode of disposing of
                                      or parting with an ‘‘asset’’. Fla. Stat. Ann. sec. 726.102(12);
                                      UFTA sec. 1(12), 7A (Part II) U.L.A. 15 (2006). If the term
                                      ‘‘asset’’ does not apply to property that has been conveyed,
                                      then there is no ‘‘transfer’’. Ries v. Wintz Props., Inc. (In re
                                      Wintz Cos.), 230 Bankr. 848, 860 (Bankr. 8th Cir. 1999) (con-
                                      struing identical language in Minnesota UFTA). A threshold
                                      question, then, is whether the condominium constituted an
                                      ‘‘asset’’ within the meaning of the FUFTA.
                                           a. Whether the Condominium Was an ‘‘Asset’’
                                         The FUFTA, like the UFTA, defines ‘‘asset’’ broadly as ‘‘prop-
                                      erty of a debtor’’ but expressly excludes ‘‘Property to the
                                      extent it is generally exempt under nonbankruptcy law’’. 7
                                      Fla. Stat. Ann. sec. 726.102(2)(b); UFTA sec. 1(2)(ii), 7A (Part
                                      II) U.L.A. 14. Petitioner contends, and respondent does not
                                      appear to dispute, that the condominium qualified as Jerry
                                      Rubenstein’s homestead under Florida law. 8 Consequently,
                                         (2) A transfer made by a debtor is fraudulent as to a creditor whose claim arose before the
                                      transfer was made if the transfer was made to an insider for an antecedent debt, the debtor
                                      was insolvent at that time, and the insider had reasonable cause to believe that the debtor was
                                      insolvent.
                                         7 The FUFTA, like the UFTA, also expressly excludes from the definition of asset ‘‘Property

                                      to the extent it is encumbered by a valid lien’’. Fla. Stat. Ann. sec. 726.102(2)(a) (West 2000);
                                      UFTA sec. 1(2)(i), 7A (Part II) U.L.A. 14 (2006). ‘‘Valid lien’’ is defined to mean ‘‘a lien that is
                                      effective against the holder of a judicial lien subsequently obtained by legal or equitable process
                                      or proceedings.’’ Fla. Stat. Ann. sec. 726.102(13); UFTA sec. 1(13), 7A (Part II) U.L.A. 15. Al-
                                      though the IRS treated the condominium as having zero equity value, indicating that it was
                                      burdened with ‘‘encumbrances or exemptions’’ equal to its value, as discussed in greater detail
                                      infra this characterization apparently reflected a judgment not that the condominium was en-
                                      cumbered but that, as Jerry Rubenstein’s principal residence and in the absence of approval by
                                      a Federal District Court, it was exempt from levy under sec. 6334(a)(13)(B). In any event, the
                                      parties have stipulated that there were no liens or other encumbrances on the condominium
                                      other than the Federal tax lien. A Federal tax lien arises upon all property rights belonging
                                      to a person liable to pay any tax who has failed to pay the liability after demand. See secs.
                                      6321 and 6322. An unfiled Federal tax lien, however, is not valid against, among others, judg-
                                      ment lien creditors. See sec. 6323(a). The IRS did not file its notice of Federal tax lien against
                                      Jerry Rubenstein until Sept. 29, 2004, about 18 months after the condominium was conveyed
                                      to petitioner and shortly after petitioner had mortgaged it to a bank. Accordingly, any Federal
                                      tax lien that arose with respect to the condominium by virtue of Jerry Rubenstein’s unpaid tax
                                      liabilities would not appear to be a ‘‘valid lien’’ within the meaning of the FUFTA. Consequently,
                                      the exclusion from the definition of ‘‘asset’’ of property encumbered by a valid lien is inapplicable
                                      to the condominium.
                                         8 Fla. Const. art. X, sec. 4, provides in pertinent part:


                                      Homesteads; exemptions
                                        (a) There shall be exempt from forced sale under process of any court, and no judgment, de-
                                      cree or execution shall be a lien thereon, except for the payment of taxes and assessments there-
                                      on, obligations contracted for the purchase, improvement or repair thereof, or obligations con-
                                      tracted for house, field or other labor performed on the realty, the following property owned by
                                                                                                    Continued




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                                      petitioner suggests, the condominium was ‘‘generally exempt
                                      under nonbankruptcy law’’ and so does not constitute an
                                      ‘‘asset’’ within the meaning of the FUFTA.
                                         We have found no case expressly addressing this issue
                                      under the FUFTA or any other State’s version of the UFTA.
                                      Petitioner’s position might appear to be bolstered by cases
                                      holding, as a general proposition, that homesteads are ‘‘gen-
                                      erally exempt under nonbankruptcy law’’ and are thus
                                      excluded from the definition of ‘‘asset’’ under the UFTA. See,
                                      e.g., O’Neil v. Jones, 403 Bankr. 228, 236 (Bankr. D. Conn.
                                      2009) (holding that homestead property was not an ‘‘asset’’
                                      under Connecticut UFTA to the extent of $75,000 homestead
                                      exemption provided under Connecticut law and stating that
                                      ‘‘a Debtor’s transfer of an interest in property that is exempt
                                      under Connecticut law cannot be a fraudulent transfer’’
                                      under Connecticut UFTA); Fidelity Natl. Title Ins. Co. v.
                                      Shroeder, 101 Cal. Rptr. 3d 854, 858 (Ct. App. 2009) (holding
                                      that the definition of ‘‘asset’’ under California UFTA excludes
                                      property subject to California’s automatic homestead exemp-
                                      tion); McCone County Fed. Credit Union v. Gribble, 216 P.3d
                                      206, 210–211 (Mont. 2009) (holding that Montana UFTA could
                                      not be used to avoid a transfer of homestead property
                                      because a homestead is not an ‘‘asset’’ under UFTA, stating
                                      that ‘‘The existence of homestead exemption provisions in
                                      over 45 states quite simply means that homesteads are ‘gen-
                                      erally exempt’ from execution or forced sales.’’); Rich v. Rich,
                                      405 S.E.2d 858, 861 (W. Va. 1991) (holding that homestead
                                      property was not an ‘‘asset’’ under West Virginia UFTA to the
                                      extent of $5,000 homestead exemption provided under West
                                      Virginia law); see also Dzikowski v. Delson, 247 Bankr. 873,
                                      875 (Bankr. S.D. Fla. 2000) (stating in dicta that a transfer
                                      of a homestead would not be avoidable under the FUFTA
                                      a natural person:
                                        (1) a homestead * * * if located within a municipality, to the extent of one-half acre of contig-
                                      uous land, upon which the exemption shall be limited to the residence of the owner or the own-
                                      er’s family;
                                        On supplemental brief respondent states: ‘‘The condominium may have qualified as a home-
                                      stead under Florida law because, as of the transfer date, the transferor resided in the condo-
                                      minium that was located within a municipality, the City of Delray Beach.’’ Respondent has
                                      raised no issue as to the applicability of the exception in the Florida homestead exemption law
                                      for ‘‘payment of taxes and assessments thereon’’. In any event, this exception, which the Court
                                      of Appeals for the Eleventh Circuit has described as applying to ‘‘unpaid property taxes on the
                                      homestead itself ’’, Havoco of Am., Ltd. v. Hill, 197 F.3d 1135, 1142 n.10 (11th Cir. 1999), ap-
                                      pears inapplicable to Jerry Rubenstein’s unpaid income tax liability.




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                                      ‘‘because an interest in homestead is ‘generally exempt under
                                      nonbankruptcy law’ ’’). But see Burrows v. Burrows, 886 P.2d
                                      984 (Okla. 1994) (holding that a father’s conveyance of home-
                                      stead property to avoid past-due support alimony and child
                                      support was fraudulent under Oklahoma’s version of UFTA).
                                         None of the just-cited cases, however, involved a situation
                                      in which the United States sought to avoid a transfer as
                                      fraudulent to collect unpaid tax liabilities. Some courts have
                                      allowed the United States to avoid transfers of homestead
                                      property under the relevant State’s version of the UFTA but
                                      have not expressly addressed whether the homestead prop-
                                      erty should be considered to be ‘‘generally exempt under non-
                                      bankruptcy law’’ within the meaning of those laws. See
                                      United States v. Bigalk, 654 F. Supp. 2d 983, 991 n.7 (D.
                                      Minn. 2009) (involving Minnesota UFTA); United States v.
                                      Stalker, 86 AFTR 2d 2000–5515, 2000–2 USTC par. 50,632
                                      (M.D. Fla. 2000) (involving FUFTA). Other courts, including
                                      this Court, have held a transfer of a residence to be fraudu-
                                      lent as to the United States under the relevant State’s
                                      version of the UFTA without expressly discussing either the
                                      subject ‘‘generally exempt’’ language or qualification of the
                                      residence for homestead exemption. See Suchar v. Commis-
                                      sioner, T.C. Memo. 2005–23 (involving Maine UFTA); Estate of
                                      Johnson v. Commissioner, T.C. Memo. 2001–182 (involving
                                      FUFTA); United States v. Tolbert, 100 AFTR 2d 2007–5982,
                                      2007–2 USTC par. 50,717 (W.D. Ark. 2007) (involving
                                      Arkansas UFTA), affd. 326 Fed. Appx. 412 (8th Cir. 2009);
                                      Sequoia Prop. & Equip. Ltd. Pship. v. United States, 90 AFTR
                                      2d 2002–6728, 2002–2 USTC par. 50,773 (E.D. Cal. 2002)
                                      (involving California UFTA). Consequently, these cases pro-
                                      vide little guidance in construing the FUFTA language in
                                      question or the UFTA language which it mirrors.
                                         According to the official comments to the UFTA, its purpose
                                      is to ‘‘protect a debtor’s estate from being depleted to the
                                      prejudice of the debtor’s unsecured creditors.’’ 9 UFTA sec. 3,
                                        9 Courts have looked to the official comments to the UFTA as an aid in construing the UFTA

                                      as enacted, in one version or another, by almost all the States. See, e.g., Garrison City Broad.,
                                      Inc. v. York Obstetrics & Gynecology, P.A., 985 A.2d 465, 468 n.5 (Me. 2009); Glimcher
                                      Supermall Venture, LLC v. Coleman Co., 739 N.W.2d 815, 820–826 (S.D. 2007); Thompson v.
                                      Hanson, 219 P.3d 659, 664 (Wash. 2009). Consulting these comments and caselaw of other juris-
                                      dictions interpreting the UFTA appears especially appropriate in the light of Fla. Stat. Ann. sec.
                                      726.112, which provides, substantially identically to UFTA sec. 11, 7A (Part II) U.L.A. 203, that
                                      the FUFTA ‘‘shall be applied and construed to effectuate its general purpose to make uniform
                                                                                                  Continued




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                                      cmt. (2), 7A (Part II) U.L.A. 48. In excluding from the defini-
                                      tion of ‘‘asset’’ property that is ‘‘generally exempt under non-
                                      bankruptcy law’’, the UFTA recognizes that exemption stat-
                                      utes are ‘‘limitations on the rights and remedies of unsecured
                                      creditors, and it is therefore appropriate to exclude property
                                      interests that are beyond the reach of unsecured creditors’’.
                                      Id. sec. 1, cmt. (2), 7A (Part II) U.L.A. 15. The comments
                                      indicate that for this purpose the question is whether the
                                      creditor could reach the property under either State or Fed-
                                      eral law:
                                         Nonbankruptcy law is the law of a state or federal law that is not part
                                      of the Bankruptcy Code, Title 11 of the United States Code. The definition
                                      of an ‘‘asset’’ thus does not include property that would be subject to
                                      administration for the benefit of creditors under the Bankruptcy Code
                                      unless it is subject under other applicable law, state or federal, to process
                                      for the collection of a creditor’s claim against a single debtor. [Id., 7A (Part
                                      II) U.L.A. 16; emphasis added.]

                                        The foregoing comments strongly suggest that property is
                                      not ‘‘generally exempt’’ as to a particular creditor, and thus
                                      falls within the UFTA definition of ‘‘asset’’, if that creditor
                                      could reach the asset by judicial process. Other comments,
                                      however, suggest a different reading of the UFTA, at least for
                                      purposes of determining whether a debtor is insolvent:
                                        The reference to ‘‘generally exempt’’ property in § 1(2)(ii) [of the UFTA]
                                      recognizes that all exemptions are subject to exceptions. Creditors having
                                      special rights against generally exempt property typically include claim-
                                      ants for alimony, taxes, wages, the purchase price of the property, and
                                      labor or materials that improve the property. See Uniform Exemptions Act
                                      § 10 and the accompanying Comment. The fact that a particular creditor
                                      may reach generally exempt property by resorting to judicial process does
                                      not warrant its inclusion as an asset in determining whether the debtor is
                                      insolvent. [Id.; emphasis added.]

                                        Respondent urges us to construe these last-quoted com-
                                      ments narrowly, stating on supplemental brief: ‘‘This pro-
                                      creditor interpretation of the provision, narrowly tailored to
                                      determining whether a debtor is insolvent, increases the
                                      chances that liabilities exceed assets and, therefore, that the
                                      transferor will be deemed insolvent.’’ It might be questioned
                                      whether ‘‘asset’’ should be defined differently for different
                                      purposes under the UFTA. Cf. UFTA sec. 1, 7A (Part II) U.L.A.
                                      the law with respect to the subject of the law among states enacting it.’’




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                                      13 (stating that the definitions contained in this definitional
                                      section are for terms ‘‘As used in this [Act]’’). Ultimately,
                                      however, we conclude that the official comments, which are
                                      simply too ambiguous to solve the interpretational problem
                                      presented, do not compel the conclusion that a creditor who
                                      is able to reach an insolvent debtor’s asset through judicial
                                      process is foreclosed from avoiding the debtor’s transfer of
                                      that asset under the UFTA merely because the asset is gen-
                                      erally exempt as to other creditors. Such a conclusion would
                                      contravene the policy of the UFTA to provide ‘‘remedies for
                                      unsecured creditors against transfers that impede them in
                                      the collection of their claims.’’ Id. cmt. (2), 7A (Part II) U.L.A.
                                      15.
                                         Consistent with this policy, the comments in question are
                                      best read, we believe, as clarifying that if a creditor cannot
                                      reach property that is ‘‘generally exempt’’ (e.g., by virtue of
                                      a homestead exemption that applies to most but not all credi-
                                      tors), then the property is not an ‘‘asset’’ for any purpose
                                      under the UFTA as to that creditor. Consequently, that cred-
                                      itor could not avoid a transfer of the property under the
                                      UFTA, notwithstanding that some other creditor, who was
                                      able to reach the property through some exception to the
                                      exemption, might be able to avoid a transfer.
                                         Because the FUFTA is substantially identical to the UFTA,
                                      we believe that the same considerations pertain in the
                                      instant case. Consequently, insofar as the condominium was
                                      subject to judicial process for collection by the United States
                                      of Jerry Rubenstein’s Federal income tax liabilities, it is
                                      properly considered to be an ‘‘asset’’ for purposes of the
                                      FUFTA.
                                         Clearly the condominium was subject to judicial process by
                                      the United States to collect Jerry Rubenstein’s taxes, not-
                                      withstanding any homestead exemption. The Code provides
                                      ‘‘two principal tools’’ to enforce the collection of unpaid taxes:
                                      lien-foreclosure suits in Federal District Court under section
                                      7403(a) and administrative levy under section 6331(a).
                                      United States v. Natl. Bank of Commerce, 472 U.S. 713, 720
                                      (1985). Pursuant to section 7403, as of the date of the
                                      transfer the United States could have enforced its lien on
                                      Jerry Rubenstein’s condominium by filing suit in Federal
                                      District Court, which would have been empowered to order
                                      the condominium’s sale, notwithstanding any homestead




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                                      protections. See United States v. Rodgers, 461 U.S. 677, 701
                                      (1983). Alternatively, the IRS could have sought authorization
                                      of the Federal District Court to levy on the condominium. 10
                                      See sec. 6334(a)(13)(B), (e)(1)(A); United States v. Estes, 450
                                      F.2d 62, 65 (5th Cir. 1971) (stating that a ‘‘homestead exemp-
                                      tion does not erect a barrier around a taxpayer’s home sturdy
                                      enough to keep out the Commissioner of Internal Rev-
                                      enue’’). 11
                                         We conclude that, as to the United States, the condo-
                                      minium was not ‘‘generally exempt under nonbankruptcy
                                      law’’ within the meaning of the FUFTA. Consequently, we con-
                                      clude that the condominium was an ‘‘asset’’ within the
                                      meaning of the FUFTA. We next consider whether the transfer
                                      of this asset was constructively fraudulent pursuant to the
                                      FUFTA.

                                           b. Whether the Transfer Was Constructively Fraudulent
                                         Respondent contends that Jerry Rubenstein’s transfer of
                                      the condominium to petitioner was constructively fraudulent
                                      under Fla. Stat. Ann. sec. 726.106(1). 12 This section
                                      (reproduced supra note 6) provides in pertinent part that a
                                      transfer by a debtor is fraudulent as to a creditor if: (1) The
                                      creditor’s claim arose before the transfer was made; (2) the
                                      debtor did not receive a ‘‘reasonably equivalent value’’ in
                                      exchange for the transfer; and (3) the debtor was insolvent
                                      at the time of the transfer or became insolvent as a result
                                      of the transfer.
                                         The parties have stipulated that as of February 21, 2003,
                                      Jerry Rubenstein owed the United States $112,420 for
                                      unpaid Federal income taxes, penalties, and interest for his
                                      taxable years 1994 through 2002. Therefore, respondent’s
                                      claim arose before the transfer was made. The parties have
                                         10 These conclusions are not altered by the fact that in calculating Jerry Rubenstein’s reason-

                                      able collection potential before the transfer, the IRS assigned zero net realizable equity to the
                                      condominium, apparently treating it as exempt for this purpose.
                                         11 Moreover, the Florida homestead exemption does not spare a residence from a Federal for-

                                      feiture. United States v. Lot 5, Fox Grove, 23 F.3d 359 (11th Cir. 1994).
                                         12 Alternatively, respondent argues that if we were to find that the condominium’s transfer

                                      was for an antecedent debt that Jerry Rubenstein owed petitioner, the transfer was construc-
                                      tively fraudulent under Fla. Stat. Ann. sec. 726.106(2), which deals with transfers by an insol-
                                      vent debtor to an ‘‘insider’’ (defined under Fla. Stat. Ann. sec. 726.102(7)(a)(1) to include a ‘‘rel-
                                      ative of the debtor’’) for an ‘‘antecedent debt’’. Because we conclude that there was no antecedent
                                      debt and that the transfer was constructively fraudulent under Fla. Stat. Ann. sec. 726.106(1),
                                      we need not and do not address respondent’s alternative argument.




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                                      further stipulated that Jerry Rubenstein was insolvent at the
                                      time of the transfer. The issue, then, is whether Jerry
                                      Rubenstein received reasonably equivalent value from peti-
                                      tioner in exchange for the transfer.
                                         Petitioner contends that the care he has provided to his
                                      father constitutes fair consideration for the condominium.
                                      Although petitioner’s care of his father is commendable,
                                      unfortunately for petitioner it does not, under the relevant
                                      legal standard, constitute ‘‘reasonably equivalent value’’ for
                                      the transfer of the condominium. Under the FUFTA, ‘‘Value’’
                                      is given for a transfer if ‘‘property is transferred or an ante-
                                      cedent debt is secured or satisfied’’. Fla. Stat. Ann. sec.
                                      726.104(1). Under these provisions, ‘‘value’’ does not include
                                      ‘‘an unperformed promise made otherwise than in the ordi-
                                      nary course of the promisor’s business to furnish support to
                                      the debtor or another person.’’ Id. Consistent with the UFTA’s
                                      purpose ‘‘to protect a debtor’s estate from being depleted to
                                      the prejudice of the debtor’s unsecured creditors’’, these
                                      provisions reflect that ‘‘Consideration having no utility from
                                      a creditor’s viewpoint does not satisfy the statutory defini-
                                      tion.’’ UFTA sec. 3, cmt. (2), 7A (Part II) U.L.A. 48.
                                         Petitioner transferred no property, or only minimal prop-
                                      erty, in exchange for the condominium. 13 Petitioner appears
                                      to concede that the care he provided his father gave rise to
                                      no debt on his father’s part. Petitioner testified: ‘‘The things
                                      I did, I did out of love. I never felt this was a debt.’’ Indeed,
                                      Florida law presumes that a parent is not obligated to pay
                                      a child, though of full age, for services the child might per-
                                      form while living with the parent at home as one of the
                                      family. See Mills v. Joiner, 20 Fla. 479, 492–493 (1884);
                                      Della Ratta v. Della Ratta, 927 So. 2d 1055, 1058–1059 (Fla.
                                      Dist. Ct. App. 2006). The presumption can be overcome by
                                      proof of a special contract or by an express or implied
                                      promise. Mills v. Joiner, supra at 492–493; Della Ratta v.
                                      Della Ratta, supra at 1059. Such proof is absent here.
                                         Petitioner suggests that his father had a moral obligation
                                      to compensate him for his caregiving. The satisfaction of a
                                        13 Although the warranty deed recites that petitioner paid $10 for the condominium, petitioner

                                      testified that he did not recall whether he had actually paid his father the $10. We are not per-
                                      suaded that petitioner paid the $10. In any event, even if petitioner had paid the $10, it would
                                      not constitute ‘‘reasonably equivalent value’’ for the condominium, which had a fair market
                                      value of $41,000 on the date of the transfer.




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                                      moral obligation, however, does not constitute ‘‘value’’ within
                                      the meaning of the FUFTA. Cf. Henkel v. Green, 268 Bankr.
                                      628, 651 (Bankr. M.D. Fla. 2001) (finding that any moral or
                                      family obligation to pay for a daughter’s wedding or to give
                                      her a wedding gift was not reasonably equivalent value for
                                      purposes of Bankruptcy Code section 548). 14
                                         Petitioner argues that, in transferring the condominium,
                                      neither he nor his father intended to hinder the collection of
                                      taxes. Because respondent has shown that the elements of
                                      Fla. Stat. Ann. sec. 726.106(1) have been met, however, the
                                      transfer is treated as constructively fraudulent; no showing
                                      of actual fraudulent intent is required. See Gen. Trading Inc.
                                      v. Yale Materials Handling Corp., 119 F.3d 1485, 1499 (11th
                                      Cir. 1997).
                                      B. Equitable Estoppel
                                         In 2002 respondent rejected Jerry Rubenstein’s offer-in-
                                      compromise, determining that he had offered less than his
                                      reasonable collection potential. A table attached to the deter-
                                      mination notice showed Jerry Rubenstein’s ‘‘net realizable
                                      equity’’ in the condominium to be zero, apparently treating it
                                      as ‘‘exempt’’. As a result, petitioner argues, respondent
                                      should be equitably estopped from now asserting transferee
                                      liability against him. We disagree.
                                         As a general matter, ‘‘the doctrine of equitable estoppel is
                                      applied against * * * [the Commissioner] ‘with the utmost
                                      caution and restraint.’ ’’ Boulez v. Commissioner, 76 T.C. 209,
                                      214–215 (1981) (quoting Estate of Emerson v. Commissioner,
                                      67 T.C. 612, 617–618 (1977)), affd. 810 F.2d 209 (D.C. Cir.
                                      1987). The Court of Appeals for the Eleventh Circuit, to
                                      which any appeal of this case would lie, has questioned
                                      whether equitable estoppel can ever be applied against the
                                      Government. See Savoury v. U.S. Atty. Gen., 449 F.3d 1307,
                                      1318 (11th Cir. 2006) (‘‘it is far from clear that the doctrine
                                      of equitable estoppel may even be applied against a govern-
                                      ment agency. The Supreme Court has never held that it may
                                      be.’’). The Court of Appeals has also held that insofar as a
                                      party may be permitted, as a matter of law, to invoke the
                                      estoppel doctrine against the Government, that party must
                                        14 Fla. Stat. Ann. sec. 726.104(1), defining ‘‘value’’ for purposes of the FUFTA, is identical to

                                      UFTA sec. 3(a). Sec. 3(a) of the UFTA, in turn, is adapted from Bankruptcy Code sec.
                                      548(d)(2)(A). See UFTA sec. 3, cmt. (2), 7A (Part II) U.L.A. 48.




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                                      prove four elements: ‘‘(1) words, conduct, or acquiescence that
                                      induces reliance; (2) willfulness or negligence with regard to
                                      the acts, conduct, or acquiescence; (3) detrimental reliance;
                                      and (4) affirmative misconduct by the Government.’’ United
                                      States v. McCorkle, 321 F.3d 1292, 1297 (11th Cir. 2003).
                                         Petitioner has proven none of these elements. In the first
                                      instance, we do not see how the complained-of communica-
                                      tion from the IRS to Jerry Rubenstein induced petitioner to
                                      do anything. Nor are we persuaded that petitioner relied
                                      upon the communication to his detriment. After all, it was
                                      Jerry Rubenstein, not petitioner, who transferred the condo-
                                      minium. 15 Cf. Boulez v. Commissioner, supra at 215 (holding
                                      that to establish equitable estoppel against the Government,
                                      there must be detrimental reliance by the party claiming the
                                      benefit of the doctrine). We also do not believe that there was
                                      any willfulness or negligence involved in the complained-of
                                      communication. 16 Nor has petitioner shown affirmative mis-
                                      conduct by the Government. ‘‘Affirmative misconduct
                                      requires more than governmental negligence or inaction’’.
                                      United States v. McCorkle, supra at 1297. Rather, affirmative
                                      misconduct requires ongoing active misrepresentations or a
                                      pervasive pattern of false promises, as opposed to an isolated
                                      act of providing misinformation. Watkins v. U.S. Army, 875
                                      F.2d 699, 708 (9th Cir. 1989). The IRS communication of
                                      which petitioner complains falls far short of affirmative mis-
                                      conduct. 17
                                         15 Petitioner argues that he has suffered detriment in that, in addition to any transferee liabil-

                                      ity he may have, he is obligated to repay money that he allegedly borrowed through his revolv-
                                      ing line of credit, which is secured by a mortgage on the condominium. Imposition of transferee
                                      liability, however, would leave petitioner no worse off than if he had never received the condo-
                                      minium, since he has gained ownership of the condominium as well as any cash borrowed
                                      through his revolving line of credit.
                                         16 Respondent did not misrepresent that the condominium was exempt from levy. A taxpayer’s

                                      principal residence is exempt from levy until a Federal District Court approves the levy. Sec.
                                      6334(a)(13)(B), (e)(1)(A). Petitioner argues that the Internal Revenue Manual (IRM) nevertheless
                                      required that respondent include the equity in the condominium in his father’s reasonable col-
                                      lection potential. The IRM as in effect at relevant times stated that ‘‘Equity in real estate is
                                      included in calculating the taxpayer’s reasonable collection potential and in an acceptable offer
                                      amount.’’ IRM pt. 5.8.5.3.11(1) (Nov. 1, 2000). Respondent has acknowledged that the IRS
                                      ‘‘sometimes exercises the discretion to accept offers for less than RCP [reasonable collection po-
                                      tential] by subtracting the value of a taxpayer’s residence from [reasonable collection potential]’’,
                                      which it did in this case. By excluding the value of the condominium from Jerry Rubenstein’s
                                      RCP, the IRS did not engage in a ‘‘false representation or wrongful, misleading silence’’, which
                                      this Court has held to be a requisite element of a claim for equitable estoppel against the Gov-
                                      ernment. See Norfolk S. Corp. v. Commissioner, 104 T.C. 13, 60 (1995), affd. 140 F.3d 240 (4th
                                      Cir. 1998).
                                         17 Petitioner also complains on brief that respondent has been unresponsive to his discovery

                                                                                                     Continued




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                                      C. Conclusion
                                         Pursuant to section 6901(a), petitioner has transferee
                                      liability of $41,000 plus interest for unpaid tax liabilities,
                                      penalties, and interest owed by Jerry Rubenstein for his tax-
                                      able years 1998 through 2002. 18 We have considered all
                                      contentions that petitioner has raised for a contrary result.
                                      Contentions not expressly addressed herein we find to be
                                      without merit or unnecessary to reach.
                                         To reflect the foregoing and respondent’s concession,
                                                                         Decision will be entered under Rule 155.

                                                                               f




                                      requests in this litigation. These untimely raised complaints provide no basis for invoking equi-
                                      table estoppel against respondent’s determination of transferee liability.
                                        18 The parties have not addressed the manner in which interest is to be computed. We expect

                                      this matter to be resolved in the Rule 155 computation.




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