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Because section 2702 does not speak to the issue of the
permissible term for a qualified annuity, Example 5 does not
expressly contradict any statutory language. Accordingly, we
focus on the statute’s origin and purpose for further guidance.
Section 2702 was enacted as part of the Omnibus Budget
Reconciliation Act of 1990, Pub. L. 101-508, sec. 11602, 104
Stat. 1388-491. Legislative history1 describes the aims which
prompted the measure:
the committee is concerned about the undervaluation of
gifts valued pursuant to Treasury tables. Based on
average rates of return and life expectancy, those
tables are seldom accurate in a particular case, and
therefore, may be the subject of adverse selection.
Because the taxpayer decides what property to give,
when to give it, and often controls the return on the
property, use of Treasury tables undervalues the
transferred interests in the aggregate, more often than
not.
Therefore, the committee determines that the
valuation problems inherent in trusts and term
interests in property are best addressed by valuing
1 Sec. 2702 originated in the Senate version of the Omnibus
Budget Reconciliation Act of 1990, Pub. L. 101-508, 104 Stat.
1388-400. See H. Conf. Rept. 101-964 (1990), 1991-2 C.B. 560,
1131-1133. The Senate bill was prepared under very limited time
constraints. See 136 Cong. Rec. 30485 (1990). In order to avoid
delay, the bill was brought to the floor without printing a
formal report of the Senate Budget Committee. See id. In lieu
thereof, the report language that had been submitted to the
Budget Committee, for inclusion in its report, by the Senate
Finance Committee relating to the bill’s provisions within the
Finance Committee’s jurisdiction, including sec. 2702, was
printed in the Congressional Record. See id. The text of the
Senate version of sec. 2702, the subject of the report language
printed in the Congressional Record, was identical in all
material respects to the statute ultimately enacted. See id. at
30818.
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