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(A) section 303(b) (relating
to distributions in redemption of
stock to pay death taxes),
(B) section 2032A (relating to
special valuation of certain farm,
etc., real property), and
(C) subchapter C of chapter 64
(relating to lien for taxes).
Section 2035(d)(3)(C) provides that the value of any gift made
within 3 years of death is included in the gross estate for
purposes of subchapter C of chapter 64. Section 6324(a)(2) falls
under subchapter C of chapter 64.
Petitioners assert that respondent's interpretation of
section 2035(d)(3)(C) is flawed in that respondent has ignored
the parenthetical language "(relating to lien for taxes)." In
petitioners' view, the parenthetical language limits the
application of section 2035(d)(3)(C) by providing that gifts made
within 3 years of death are treated as if they are included in
the gross estate only for purposes of a lien provision contained
in subchapter C of chapter 64--such as section 6324(a)(1).5
Petitioners argue that the first sentence of section 6324(a)(2)
is a personal liability provision, as opposed to a lien
5 Sec. 6324(a)(1), quoted supra at p. 6, provides that
property included in the gross estate shall be subject to a
10-year lien for unpaid estate taxes.
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Last modified: May 25, 2011