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to the 3-year rule. The court questioned whether the
“irrebuttable presumption” doctrine as applied in Heiner v.
Donnan, supra, had “any continued vitality.” Id. at 486. The
court stated: “Even assuming that the doctrine is still good
law, it is inapplicable to section 2035(a) since the statute on
its face does not speak in terms of presumptions of fact,
rebuttable or otherwise.” Id. The court held the 1976 amendment
to section 2035(a) “bore a rational relationship to a legitimate
congressional purpose: eliminating factbound determinations
hinging upon subjective motives.” Id.
The 1976 amendment of section 2035(a) was part of a
comprehensive reform of the estate and gift tax system. Before
1976, the Federal gift tax and estate tax were essentially
separate; gift tax rates were lower than estate tax rates.
Congress concluded that this dual transfer tax system created
unwarranted disparities in the treatment of lifetime and
deathtime transfers of wealth. See Estate of Sachs v.
Commissioner, 88 T.C. at 774-775. The 1976 Act reduced these
disparities by adopting unified estate and gift tax rates to be
applied to cumulative lifetime and deathtime transfers. See
Staff of the Joint Comm. on Taxation, General Explanation of the
Tax Reform Act of 1976, 1976-3 C.B. (Vol. 2) 1, 538.
Merely conforming the gift and estate tax rates, however,
did not eliminate all tax incentives for lifetime transfers. One
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