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Rule 155 computation raises a new issue because it eliminates the
$1,183,029 gift tax deduction that respondent allowed in
calculating the estate tax deficiency he determined in the
September 26, 2001, estate tax notice of deficiency. Petitioner
argues that, because respondent did not contest the gift tax
deduction before submitting his Rule 155 computation,
respondent’s attempt to disallow the gift tax deduction raises a
new issue, which is prohibited by Rule 155(c).3 Accordingly,
petitioner’s Rule 155 computation begins with the deficiency set
forth in the September 26, 2001, estate tax notice of deficiency,
$1,071,650. From that amount, petitioner subtracts the
following:
Credit allowed for taxes paid to Oklahoma
State as of statutory notice ($88,737.00)
Total State death tax paid as of 8/28/07 284,406.50
Balance of State death tax credit 195,669.50 ($195,669.50)
Additional expense submitted to IRS
and accepted 296,292.55
Executors fee paid to Pamela Powell20,814.00
Interest to Oklahoma (negotiated to
one-half of billed amount) 103,812.00
Total additional expenses without
Federal interest included 420,918.55
Tax on above amount at 55 percent (231,505.20)
Balance on tax 644,475.30
On October 9, 2007, respondent filed his statement regarding
the Rule 155 computation dispute. Respondent’s computation
3 Rule 155(c) provides that “no argument will be heard upon
or consideration given to the issues or matters disposed of by
the Court’s findings and conclusions or to any new issues.”
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Last modified: March 27, 2008