Audrey J. Walton - Page 16

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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                
                    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            

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