- 102 -
used to disguise the transferor. See Schultz v. United States,
493 F.2d 1225, 1226 (4th Cir. 1974) (finding that brothers
planned to avoid gift taxes through repeated reciprocal gifts to
each others’ children); Griffin v. United States, 42 F. Supp.2d
700, 707 (W.D. Tex. 1998) (finding that husband and wife engaged
in a scheme where the wife “was merely the intermediary through
which the stock passed on its way to the ultimate beneficiary”);
Estate of Murphy v. Commissioner, T.C. Memo. 1990-472
(disregarding an intrafamily stock transfer where the Court found
an informal family agreement to control the stock collectively).
In Heyen v. United States, 945 F.2d 359 (10th Cir. 1991)
(disregarding as shams 27 transfers of stock to intermediate
beneficiaries who then transferred the stock to the original
transferor’s family), however, the intermediary was used in an
attempt to disguise the transferee. Respondent, relying on
Heyen, asserts that the Symphony and CFT were merely
intermediaries in petitioners’ plan to transfer their MIL
interests to their sons and the trusts.
In Heyen, a taxpayer, seeking to avoid the gift tax by
taking advantage of the annual gift tax exclusion, transferred
stock to 29 intermediate recipients, all but two of whom made
7(...continued)
courts have been reluctant to use substance over form in certain
cases involving completed gifts to charity. E.g., Carrington v.
Commissioner, 476 F.2d 704 (5th Cir. 1973) (holding, in an income
tax case, that where respondent seeks to use the step transaction
doctrine to disregard a donation of appreciated property to a
charitable organization, the central inquiry is whether the donor
parted with all dominion and control), affg. T.C. Memo. 1971-222.
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