Monday, November 19, 2012
As I have previously discussed, the Internal Revenue Service (IRS) withdrew its appeal to the Tenth Circuit Court of Appeals in Wandry v.Comm'r. In Wandry, the tax court held that the use of a formula gift clause was an appropriate method to avoid an inadvertent gift tax on property that could be re-evaluated by the IRS to exceed the amount that was gifted. Recently, the IRS has released Internal Revenue Bulletin: 2012-46. In the bulletin, the IRS explained that the Service does not acquiesce in the decision in Wandry. This means that the IRS commissioner does not agree with the decision the court and will not follow the ruling in cases that involve other taxpayers nationwide. However, there is one exception to this in that the "Service will recognize the precedential impact of the opinion on cases arising within the venue of the of deciding circuit."
See Internal Revenue Bulletin 2012-46, IRS, Nov. 13, 2012.
Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.