Tex.
Tax Code Section 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.
Source:
Section 111.024 — Liability in Fraudulent Transfers, https://statutes.capitol.texas.gov/Docs/TX/htm/TX.111.htm#111.024
(accessed Jun. 5, 2024).