-27-
charitable giving. United States v. Benedict, 338 U.S. 692, 696-
97 (1950).
The Commissioner nevertheless analogizes the contested
phrase to the one analyzed in Commissioner v. Procter, 142 F.2d
824 (4th Cir. 1944). In Procter v. Commissioner, a Memorandum
Opinion of this Court dated July 6, 1943 (1943 WL 9169), the
Fourth Circuit was faced with a trust indenture clause specifying
that a gift would be deemed to revert to the donor if it were
held subject to gift tax. Id. at 827. The court voided the
clause as contrary to public policy, citing three reasons:
(1) The provision would discourage collection of tax, (2) it
would render the court’s own decision moot by undoing the gift
being analyzed, and (3) it would upset a final judgment.
This case is not Procter. The contested phrase would not
undo a transfer, but only reallocate the value of the property
transferred among Hamilton, the Trust, and the Foundation. If
the fair market value of the estate assets is increased for tax
purposes, then property must actually be reallocated among the
three beneficiaries. That would not make us opine on a moot
issue, and wouldn’t in any way upset the finality of our decision
in this case.
We do recognize that the incentive to the IRS to audit
returns affected by such disclaimer language will marginally
decrease if we allow the increased deduction for property passing
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