KRS 131.550: Assessment against transferee of a fraudulent conveyance made with

intent to hinder or evade collection of tax due from transferor.

(1) When the Department of Revenue reasonably believes that any taxpayer has

divested himself by gift, conveyance, assi gnment, transfer of, or charge upon any

property, whether real, personal, tangible or intangible, with the intent to hinder or

evade the collection of any tax assessed or to be assessed by the department or

declared by the taxpayer on a return filed with t he department, any transferee of

such property may be assessed by the Department of Revenue an amount equal to

the lesser of the amount of tax assessed against the transferor taxpayer or the fair

market value of the property so transferred. However, no ass essment shall be made

pursuant to this section against a transferee who takes the property for full and

valuable consideration in money or money's worth, unless it appears that such

transferee had notice of the intent of the transferor taxpayer to hinder o r evade the

collection of any tax.

(2) Any assessment made by the Department of Revenue against a transferee pursuant

to subsection (1) of this section is, except as provided in this section, subject to the

same provisions and limitations as in the case of the taxes for which the liabilities

were incurred.

(3) The period of limitation for assessment of any liability against a transferee pursuant

to subsection (1) of this section shall be as follows:

(a) In the case of an initial transferee, within one (1) y ear after the expiration of

the period of limitation for assessment against the transferor taxpayer; and

(b) In the case of the liability of a transferee of a transferee, within one (1) year

after the expiration of the period of limitation for assessment a gainst the

preceding transferee, but not more than three (3) years after the expiration of

the period of limitation for assessment against the initial transferor taxpayer.

(4) The notice of any assessment against a transferee made pursuant to subsection (1) of

this section shall be either given to the transferee in person or sent by mail to such

transferee's last known address.