W. August Hillenbrand and Nancy K. Hillenbrand - Page 3




                                        - 3 -                                         
               Respondent examined petitioners’ 1993, 1994, 1995, and 19961           
          Federal gift tax returns.  For the same periods, respondent also            
          examined the gift tax returns of petitioners’ children and son-             
          in-law.  Petitioners’ gifts to their children and son-in-law were           
          of Hillenbrand Industries stock, interests in a limited                     
          partnership, and remainder interests in certain so-called GRATs.            
               On September 15, 1998, petitioners’ attorney, Larry J.                 
          Stroble, sent respondent a letter accompanied by six checks                 
          remitted by petitioners, William A. Hillenbrand II, Theresa A.              
          Hartmann, Katherine K. Crowther, Richard D. Hillenbrand II, and             
          Martha L. Tuveson.  The letter, dated September 15, 1998,                   
          accompanying the six checks, stated:                                        
                    Enclosed are various checks which are to be                       
               considered deposits in the nature of cash bonds in                     
               accordance with Rev. Proc. 84-58.  The checks are cash                 
               bonds related to the tax deficiency and interest                       
               asserted by the Internal Revenue Service in connection                 
               with gift tax examinations of the taxpayers for the                    
               years reflected below, and are intended to halt the                    
               accrual of interest on such tax deficiencies and                       
               previously accrued interest.                                           
               The six checks totaled $1,457,460.  The check remitted on              
          behalf of petitioners was in the amount of $1,242,082, or                   
          $621,041 on behalf of each petitioner.  Petitioners intended the            
          check to cover their 1993, 1994, 1995, and 1996 Federal gift tax            
          years, as explained in the letter accompanying the check.                   


               1Petitioners’ 1996 Federal gift tax year is not before this            
          Court in the instant case.                                                  





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