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Gardiner even before the estate tax return was filed. Petitioner
is an attorney. He knew or should have known that distributions to
a beneficiary of an estate prior to satisfying the estate tax are
made at the executor’s peril.
Petitioner states in his post-trial brief:
but for the disallowance of the 1978 theft
from the estate, this case would not be in
court as that deficiency assessment caused the
estate to have insufficient funds to pay all
claims including the claim of the Internal
Revenue Service.
Again, petitioner’s argument misses the point. It was petitioner’s
permitting the Estate to distribute funds to others which resulted
in the plight petitioner now faces, rather than the disallowance of
the claimed theft loss. Consequently, we hold petitioner liable
under 31 U.S.C. section 3713(b) (1994).
When an executor incurs personal liability under 31 U.S.C.
section 3713(b) (1994), his liability for unpaid estate tax and
accrued interest thereon prior to the date the executor’s liability
for the estate tax arose is limited to the amount of payments made
to others. To our knowledge, there are no cases discussing whether
an executor is liable for interest accruing after the notice of
liability has been mailed. Respondent requests us to hold that
interest accrues until the estate tax, and interest accrued
thereon, is paid. In this regard, respondent argues that we should
extend the rationale this Court adopted in Baptiste v.
Commissioner, 100 T.C. 252 (1993), affd. 29 F.3d 1533 (11th Cir.
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