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1415, 1429 (1987). As we understand it, petitioners' argument is
that all transfers by Larry, Kathy, John, Sandra, Duane, Diane,
and Rodney, in each year, were really separate steps of a single
transaction. Therefore, petitioners argue, the transaction must
be viewed and taxed as a “whole”, and Rodney's participation
destroys the reciprocal nature of the entire transaction because
he received nothing in return for his gifts.
To the extent petitioners suggest that Rodney's unilateral
gift giving somehow validates the entire transaction and destroys
the reciprocal nature of the gifts, we disagree. Rodney is a
separate taxpayer whose gifts have not been challenged. That his
gifts may have passed scrutiny does not dictate the result as to
the other taxpayers. Rodney's participation in the gift giving
in no way lends economic reality to the form in which the other
donors structured the transfers, and his participation does not
immunize the questioned transfers from application of the
doctrine of economic substance or the reciprocal trust doctrine.
This leaves the issue of whether the Larry Trust, the John
Trust, and the Duane Trust are liable as transferees for the
unpaid gift tax and additions to tax of Kathy, Sandra, and Diane,
respectively. The second sentence of section 6324(b)4 provides
4SEC. 6324. Special Liens for Estate and Gift Taxes.
(b) Lien for Gift Tax.-- * * * unless the gift tax
imposed by chapter 12 is sooner paid in full or becomes
unenforceable by reason of lapse of time, such tax
(continued...)
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