- 10 -
provision simply reflects a "how" characterization. We follow
that path herein.
Under these circumstances and applying the teaching of the
decided cases, we hold that the regulations contemplated under
section 2663(2) reflect a "how" characterization and their
issuance is not a necessary precondition to the imposition of the
GST tax on the transfers involved herein. In enacting section
2663(2), Congress simply recognized that there would be problems
of allocation and calculations of tax in respect of nonresident
aliens because, unlike citizens and residents, not all the
property of nonresident aliens is subject to U.S. estate tax.
We are unimpressed with petitioner's attempt to create a
"whether" patina to section 2663(2) by pointing to alleged gaps
and possible invalid provisions of the proposed regulations
dealing with the definition of "direct skip" transfers and the
calculation of the taxable amount of a "direct skip" and
applicable rate of tax. Such gaps and provisions clearly go to
the "how" and not to the "whether" in respect of the application
of the GST tax.3 In this connection, we note that petitioner
3 For a critical analysis of the proposed regulations, see
Schlesinger, "The Generation-Skipping Transfer Tax--A
Reexamination on Its Ninth Anniversary", 74 Taxes 49 (Jan. 1996);
Heller & Sasaki, "Proposed Regulation Section 26.2663-2 and the
Application of the Generation-Skipping Transfer Tax to Transfer
by Nonresident Aliens", 12 Intl. Tax & Bus. Law. 291 (1994); see
also Helt, "Generation-Skipping Transfer Tax Regulations," 74
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