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established in case law and published IRS positions.
* * * There is no indication that Congress intended to
supersede this well-established case law and
administrative ruling position when it enacted section
7520. Consequently, in the case of transfers prior to
the effective date of these regulations, the question
of whether a particular interest must be valued based
on the tables will be resolved based on applicable case
law and revenue rulings.
Accordingly, the estate references both case law and section
20.7520-3(b)(1)(ii), Estate Tax Regs., to establish that
decedent’s lottery winnings, even if considered an annuity under
section 7520, need not be valued by means of the prescribed
tables.
At the time section 7520 was enacted, this and other courts
had long accepted as a general rule that interests covered by
then-existing regulatory tables were to be valued thereunder
“‘unless it is shown that the result is so unrealistic and
unreasonable that either some modification in the prescribed
method should be made * * * or complete departure from the method
should be taken, and a more reasonable and realistic means of
determining value is available.’” Vernon v. Commissioner, 66
T.C. 484, 489 (1976) (quoting Weller v. Commissioner, 38 T.C.
790, 803 (1962)); see also Berzon v. Commissioner, 534 F.2d 528,
531-532 (2d Cir. 1976), affg. 63 T.C. 601 (1975); Continental
Ill. Natl. Bank & Trust Co. v. United States, 504 F.2d 586, 594
(7th Cir. 1974); Froh v. Commissioner, 100 T.C. 1, 3-4 (1993),
affd. without published opinion 46 F.3d 1141 (9th Cir. 1995);
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