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preferable to the majority opinion. Adoption of Judge Colvin’s
view by a majority of the Court would provide clear guidance as
to how we would resolve the treatment of both private parties in
this type of consolidated case.
(4) Maybe the “on behalf of” and “primary and unconditional
obligation” standards, in a hard-fought consolidated case with no
improvident concession by either private party, can be so applied
that both ex-spouses escape tax.8 Both traditional redemption
tax law and section 1041 reflect the same policy of facilitating
transactions by removing tax impediments. Maybe respondent,
instead of being a putative stakeholder, is left holding an empty
bag! I don’t think so.
Some concluding thoughts: the parties’ motions and memos in the
case at hand leave the impression that Mr. Read’s indication--he
loses if Mrs. Read wins--was based on what the majority opinion now
tells the parties was their mistaken belief about the applicable
8 There’s another way (a far-out fifth possibility) the
Court could hold that both parties escape tax, which the Court
has properly rejected. There is a view (disagreed with in the
writer’s Arnes v. Commissioner, 102 T.C. 522 (1994) (Arnes II)
concurrence) that the Ninth Circuit Court of Appeals, with whose
views the Court expressed disagreement in Blatt and Arnes II, has
indicated in Arnes v, United States, 981 F.2d 456 (9th Cir. 1992)
(Arnes I), and Ingham v. United States, 167 F.3d 1240 (9th Cir.
1999), that it reads the “on behalf of” standard more expansively
than the Court has been willing to do. The Court could have
decided in favor of Mrs. Read under Golsen v. Commissioner, 54
T.C. 742, 757 (1970), affd. 445 F.2d 985 (10th Cir. 1971), and
decided in favor of Mr. Read by applying the “primary and
unconditional standard”, as Judge Halpern and the writer would
do, or the view of Judges Laro and Marvel that the “on behalf of”
standard of Q&A-9 does not apply to redemptions.
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