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the transfer in dispute from GST tax, inasmuch as decedent’s
exercise of her general power of appointment under the Benjamin
Gerson Trust in favor of her grandchildren constituted a
“generation-skipping transfer under a trust that was irrevocable
on September 25, 1985”. Petitioner maintains section 26.2601-
1(b)(1)(i), GST Tax Regs., is an invalid attempt by the Secretary
to “re-write the statute and to override the judicial
construction of the statute’s plain language”.6 As petitioner
sees it, TRA 1986 section 1433(b)(2)(A) was intended to protect
the reliance interest of a grantor of a trust that was
irrevocable on September 25, 1985--that is, Congress intended
such grantors could be assured any transfer from an irrevocable
trust would not be subjected to GST tax.
Respondent maintains section 26.2601-1(b)(1)(i), GST Tax
Regs., is a reasonable and valid interpretation of TRA 1986
section 1433(b)(2)(A). Respondent avers TRA 1986 section
1433(b)(2)(A) is silent regarding the proper treatment of
transfers from irrevocable trusts pursuant to the exercise of a
general power of appointment, and section 26.2601-1(b)(1)(i), GST
Tax Regs., reasonably fills the statutory gap. Relying on the
Second Circuit opinion in Peterson Marital Trust for the general
6 In connection with this point, petitioner contends TRA
1986 sec. 1433(b)(2)(A) was carefully drafted to except from the
GST tax any transfer under a trust that was irrevocable on Sept.
25, 1985, with one narrow exclusion for transfers made out of
corpus added to the trust after Sept. 25, 1985.
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