- 71 -
Commissioner, 93 T.C. at 472. The Court in Bank of the West
noted that there was no “evidence of any action by the Internal
Revenue Service exercising its discretion to permit the payment
of the tax in installments.” Id. at 473. Because reasonable
cause must have existed when the tax was due, the significance of
the Internal Revenue Service’s action or inaction regarding a
section 6166 election is in determining the taxpayer’s
reasonableness in believing that a valid election was made at the
time the tax was due.
In the instant case petitioner’s executor, Hinz, at the time
the estate tax was required to be paid reasonably believed that
the section 6166 election was valid. Before the extended due
date for payment of the tax, Christy advised Hinz that a section
6166 election could be made to pay the estate tax in
installments. Hinz as executor of the estate relied on this
advice. Furthermore, respondent, having the untimely filed
return and a copy of the approved request for extension of time
to file, tentatively approved petitioner’s section 6166 election.
Under these circumstances, we hold that Hinz exercised ordinary
business care and prudence in providing for the payment of
petitioner’s tax liability subject to the section 6166 election.
We hold for petitioner on this issue.
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