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him, inter alia, control over the dividend policy of such
corporations, Mr. Byrum retained the right under section
2036(a)(2) to designate the persons who were to enjoy the income
from the transferred property. Id. at 131-132. The Government’s
alternative argument was that, by retaining voting control over
the corporations whose stock he transferred to the trust, which
gave him, inter alia, the power to determine whether and when
such corporations would be liquidated or merged, Mr. Byrum
retained under section 2036(a)(1) the enjoyment of the
transferred property. Id. at 145.
The Supreme Court rejected the Government’s principal
argument under section 2036(a)(2) and its alternative argument
under section 2036(a)(1), both of which were based on a “control”
standard advanced by the Government. In rejecting the
Government’s arguments, the Supreme Court expressly rejected the
use of a “control” standard as “the basis per se” in applying
section 2036(a). The Supreme Court concluded:
The “control” rationale, urged by the Government * * *,
would create a standard--not specified in the statute--
so vague and amorphous as to be impossible of
ascertainment in many instances. * * *
* * * * * * *
The Government uses the terms “control” and
“controlling stockholder” as if they were words of art
with a fixed and ascertainable meaning. In fact, the
concept of “control” is a nebulous one. Although in
this case Byrum possessed “voting control” of the three
corporations (in view of his being able to vote more
than 50% of the stock in each), the concept is too
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