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in valuation and (2) an inaccuracy in valuation caused by an
uncertainty that a survivorship interest will never be paid. See
T.D. 9181, 70 Fed. Reg. 9222 (Feb. 25, 2005). As to the
requirement of substantial deference, such a requirement would
appear to be at its strongest here, where the regulation in
question (i.e., the rule that allows a retention of a right to
revoke not to be considered a retention for purposes of section
2702) does not appear in the statute or in its legislative
history, but is a creation of the Treasury Department. As to the
recent amendments to the regulations, those regulations state
specifically that revocable spousal interests such as those here
are not qualified interests.8 They also include provisions that
(1) define the word “holder” to mean the person to whom the
qualified interest is payable during the term, see current sec.
25.2702-2(a)(5), Gift Tax Regs.; (2) require that a spousal
interest subject to a revocation power independently meet the
regulatory requirements for a qualified interest, but for the
transferor's power to revoke, see current sec. 25.2702-2(a)(6),
Gift Tax Regs.; and (3) state that a qualified interest may only
be contingent on the survival of the holder, see current sec.
25.2702-3(d)(2), Gift Tax Regs. The amendments also add to the
regulations a new example that illustrates a revocable spousal
8 As mentioned supra note 2, those amendments are not
applicable here in that they apply to trusts created on or after
July 26, 2004.
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