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proceeding within the meaning of section 2055(e)(3)(C)(iii),
which ultimately culminated in the 2003 amendment that amended
the payment terms for the noncharitable beneficiaries so that a
qualified interest was created.15 We disagree. Filing a Federal
estate tax return in no way commences a judicial proceeding. The
commencement date for a judicial proceeding for purposes of
section 2055(e)(3)(C)(iii) has been strictly construed. See
Estate of Hall v. Commissioner, 93 T.C. 745 (1989) (State court's
nunc pro tunc effective date for trust reformation disregarded in
determining date of commencement of judicial proceeding under
section 2055(e)(3)(C)(iii)). In sum, the claim that the trust
was amended by virtue of the return statement does not withstand
scrutiny.
The estate's argument that the section 2055(e)(3)
reformation provisions were satisfied because the trust was
managed by the trustee in conformance with the requirements of a
CRUT, since the payments to noncharitable beneficiaries were in
fact equal to 5 percent of the fair market value of the trust's
assets, is similarly unavailing. The claim that it should be
15 The 2003 amendment fixed the annual payments to the
noncharitable beneficiaries (in the aggregate) at 5 percent of
the net fair market value of the trust's assets (allocated among
those beneficiaries generally according to the payments specified
in the original trust instrument). However, the 2003 amendment
was not executed, or consented to by any beneficiaries, until
August 2003.
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