Sunday, September 5, 2004

Daniel Ruttenberg has published The Tax Court’s Execution of the Family Entity: The Tax Court’s Application of Internal Revenue Code Section 2036(a), 80 N.D. L. Rev. 41 (2004). Here is part of the Conclusion:

The Tax Court is aggressively applying section 2036(a) to family entities that are commonly used for estate planning. It has signaled to the IRS to challenge all entities under section 2036(a)(2) if family members own most of the entity or if the entity does not run a business. In such situations, the Tax Court will not consider the fiduciary duty owed to family members significant enough to amount to a legal restriction on the donor-decedent’s “right to designate” and will apply section 2036(a)(2).