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Rosenberg’s Will, 199 N.E. 206 (N.Y. 1935), cert. denied 298 U.S.
669 (1936), “held that the interest of a beneficiary under a New
York spendthrift trust may be reached by the United States under
an income tax lien”. Mahler v. Commissioner, T.C. Memo. 1987-64.
The Court of Appeals for the Second Circuit, to which appeal
in the instant case would normally lie, has indicated that where,
under State law, a beneficiary can force a trustee to act, as in
a support trust, the beneficiary has an interest in property
subject to Federal tax lien. Magavern v. United States, supra at
802. In this context, the Court of Appeals has also explained
that “New York law clearly establishes * * * that an aggrieved
trust beneficiary can enforce his right to trust property or
income against a trustee who refuses to exercise his discretion
as directed in the trust instrument”. Id. (citing In re
Rosenberg’s Will, supra). Further, “the New York Court of
Appeals has included taxes within the definition of the term
‘support’ in a case involving enforcement of a federal tax lien
against a beneficiary’s rights in a spendthrift trust.” Id.
(citing In re Rosenberg’s Will, supra); see also United States v.
Murray, 217 F.3d 59, 65 & n.5 (1st Cir. 2000); United States v.
Rye, 550 F.2d 682, 685 (1st Cir. 1977); Rev. Rul. 55-210, 1955-1
C.B. 544.
At the time petitioner’s offer in compromise was under
consideration, the trust corpus was approximately $175,000. Her
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