- 35 -
(including leases) was $9,941,000. The results of the B. Allen
report were generally discussed at True family meetings; however,
there is no evidence in the record that the True children
reviewed the report in detail before signing the True Oil buy-
sell agreement. Mr. Harris did not use the B. Allen report to
advise members of the True family (at the time of signing the
True Oil buy-sell agreement) that tax book value was the
appropriate standard; he reviewed the report only in connection
with subsequent gift tax litigation.
C. Wyoming U.S. District Court Cases on Belle Fourche
and True Oil Transfers
Dave True timely filed a 1973 Federal gift tax return
reporting gifts of an 8-percent interest in True Oil and in True
Drilling to each of his children. Jean True consented to treat
the gifts as having been made one-half by each spouse. Each True
Oil gift was reported to have a fair market value of $54,653,
which represented the tax book value of an 8-percent interest as
of August 1, 1973. The 1971 transfers of Belle Fourche stock to
the True children (valued at $38.69 per share) had not been
reported on a gift tax return because they were structured as
sales by the corporation.
The Commissioner determined gift tax deficiencies against
Dave and Jean True for the 1971 Belle Fourche transfers. The
Trues paid the gift taxes assessed and filed a refund suit in the
U.S. District Court for the District of Wyoming, designated as
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