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To satisfy “undue hardship”, it must appear that substantial
financial loss would result to the taxpayer from making payment
by the due date. Sec. 1.6161-1(b), Income Tax Regs.; see also
sec. 20.6161-1(a)(2)(ii), Estate Tax Regs. Further, if a market
exists, the sale of property at the current market price is not
ordinarily considered an undue hardship. Sec. 1.6161-1(b),
Income Tax Regs.; see also sec. 20.6161-1(a)(2)(ii), Estate Tax
Regs.
Consideration will be given to all the facts and
circumstances of the taxpayer’s financial condition in
determining whether the taxpayer was unable to pay despite the
exercise of ordinary business care and prudence. Sec. 301.6651-
1(c), Proced. & Admin. Regs.
I. Contentions of the Parties
Mr. Renbarger concedes that he did not pay the estate’s
Federal estate tax timely but argues that his failure to pay was
due to reasonable cause rather than willful neglect.
Specifically, Mr. Renbarger argues that he created a plan to pay
the Federal estate tax, that the plan was prudent and reasonable,
and that he could not have paid the Federal estate tax when due
without “extreme hardship”.
Respondent counters that the estate failed to show
reasonable cause and lack of willful neglect and did not exercise
ordinary business care and prudence to pay its Federal estate
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Last modified: May 25, 2011