Recent Articles

Discussion of Kohler Case

Guy B. Maxfield
July 29, 2008 18:26

The discussion of the Kohler case, posted on March 4, 2008, requires an update.  The Internal Revenue Service has issued Proposed Regulations, Section 20.2032-1(f) which provide that the election to use the alternate valuation can be utilized only to the extent that the change in value during...

VALUATION: WHEN CAN SECTION 7520 BE AVOIDED?

Guy B. Maxfield
March 12, 2008 20:34

The Fifth Circuit in Taylor v. United States, ___F.3d___, 2008 WL 57081 (5th Cir. 2008) faced the issue of how to value payments made pursuant to a structured settlement arising from tort claims, which payments could not be anticipated, sold, assigned or encumbered. The issue is whether the...

NONACQUIESCENCE AND FAILURE TO APPEAL

Guy B. Maxfield
March 04, 2008 18:15

Once again the Internal Revenue Service in AOD 2008-1 announced its nonacquiescence in Herbert V. Kohler, Jr., v. Commissioner, T.C. Memo 2006-152(2006), but did not appeal the adverse result in the Tax Court.In Kohler, a shareholder died and two months later the corporation reorganized tax-free...

EQUITABLE RECOUPMENT

Guy B. Maxfield
February 20, 2008 16:46

The Supreme Court first approved an application of the doctrine of equitable recoupment in Bull v. United States, 295 U.S. 247 (1935). In a case of first impression, the Tax Court (Menard, Inc. v. Commissioner, 130 T.C. No. 4 (2008)) held that under the doctrine of equitable recoupment, it had...

FORMULA DISCLAIMERS

Guy B. Maxfield
February 07, 2008 17:13

In a fully reviewed opinion, the United States Tax Court in the Estate of Christiansen v. Commissioner, 130 TC No.1 (2008) rendered what may become a landmark case dealing with “formula disclaimers.”The decedent’s daughter made a formula disclaimer of everything in the...

ARE TAX-ACCRUAL WORKPAPERS GENERATED BY CORPORATION AND ITS INDEPENDENT AUDITOR SO THAT CORPORATION COULD COMPLY WITH SEC FILING REQUIREMENTS SUBJECT TO AN IRS SUMMONS??? ---STAY TUNED!

Jason Grimes
February 07, 2008 15:55

On January 25, 2008 the Justice Department submitted a brief for the First Circuit, arguing that a district court erred in U.S. v. Textron Inc. and Subsidiaries, 507 F. Supp. 2d 138 (D.R.I. 2007) by refusing to enforce an IRS summons and in holding that tax accrual workpapers prepared by a public...

Treasury Suggests Congress Cut Us a Break

Jason Grimes
February 05, 2008 22:53

On February 4, 2008 as part of President Bush's proposed fiscal 2009 budget, Treasury suggested that Congress give tax return preparers a break.  Realizing the potential conflict between the client taxpayer and the preparer the Treasury made the following proposal: “The...

Family Limited Partnerships

Guy B. Maxfield
January 29, 2008 19:41

       The most recent appellate case involving family limited partnerships, Estate of Bigelow v. Commissioner, 503 F.3d 955, 2007 WL 2684526 (9th Cir. 2007) deserves careful study for the discussion of the "bona-fide sale for adequate and full consideration,"...

CAN EQUITABLE TOLLING APPLY TO THE 90 DAY FINAL DETERMINATION LETTER FOR AN INNOCENT SPOUSE?

Jason Grimes
January 16, 2008 20:22

That’s the question currently being considered in the Tax Court in what most likely will be a fully reviewed opinion. The facts of the case are as follows, the taxpayer applied to the IRS for innocent spouse relief in August of 2002. The IRS made a final determination denying the requested...

UNLESS YOU ARE IN THE 11TH OR 5TH CIRCUIT PLAN ON LITIGATING WHETHER AND HOW MUCH TO TAKE INTO ACCOUNT FOR CORPORATION'S BUILT-IN CAPITAL GAINS TAX LIABILITY FOR ESTATE TAX VALUATION PURPOSES.

Jason Grimes
December 27, 2007 22:36

Estate of Jelke III v. Comm'r 2007 WL 3378539 (11th Cir. 2007) involves the proper valuation for estate tax purposes of a 6.44% stock interest, or 3,000 shares, owned by the decedent, Jelke, in a closely-held, investment holding company, owning appreciated, marketable securities. In a case of first...