Rosalyn Deutsch - Page 10

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          diverted from himself and his relatives their share of the income           
          tax burden”.  The complaint did not name Mr. Braunstein.                    
               On January 31, 1991, petitioner proposed settling her suit             
          against Mr. Deutsch.  She asked the estate to place $124,000 in             
          escrow until expiration of the 3-year period of limitations on              
          petitioner's 1989 Federal income tax return, to be paid only if             
          respondent determined an income tax deficiency against petitioner           
          by reason of her receipt of the elective share.  In the same                
          letter, petitioner asserted that “no case law, statutory law or             
          IRS ruling * * * holds that the Florida elective share carries              
          out distributable net income”.  Mr. Deutsch responded that he did           
          not wish to play “audit roulette”, and counter-offered to pay               
          petitioner $50,000 to settle all her claims and serve as a “war-            
          chest” for any controversy with respondent.  In April 1991,                 
          petitioner accepted that offer and settled her suit against Mr.             
          Deutsch for a payment of $50,000.                                           
               On August 13, 1993, prior to the August 15, 1993, expiration           
          of the period of limitations on assessment of a 1989 income tax             
          deficiency against the estate, respondent determined that                   
          petitioner had received a distribution of income of $707,095 from           
          the estate during 1989 and sent her a notice of a deficiency of             
          $201,825 in her income tax for that year.  Petitioner filed a               
          timely petition with this Court.                                            







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