230
Opinion of the Court
for summary judgment, the District Court held that imposing the gift tax on Mrs. Irvine's disclaimer would amount to retroactive application of the gift tax in violation of the Act's provision that "[t]he tax shall not apply to a transfer made on or before the date of the enactment of this Act [June 6, 1932]." Revenue Act of 1932, ch. 209, § 501(b), 47 Stat. 245. The District Court cited Ordway v. United States, 89-1 USTC ¶ 13,802 (1989), in which the United States District Court for the Southern District of Florida had reached the same conclusion, on virtually identical facts, in a case involving a partial disclaimer by another beneficiary of the Ordway trust.
A divided panel of the Court of Appeals for the Eighth Circuit reversed. 936 F. 2d 343 (1991). It rejected the view that the Regulation is inapplicable to a trust created before enactment of the gift tax statute simply because the Regulation reaches only " 'taxable transfers creating an interest in the person disclaiming made before January 1, 1977.' " Id., at 347 (emphasis in original). The Court of Appeals held that the transfer creating the trust was "taxerty transferred from a decedent (whether the transfer is effected by the decedent's will or by the law of descent and distribution), a refusal to accept ownership does not constitute the making of a gift if the refusal is made within a reasonable time after knowledge of the existence of the transfer. The refusal must be unequivocal and effective under the local law. There can be no refusal of ownership of property after its acceptance. In the absence of the facts to the contrary, if a person fails to refuse to accept the transfer to him of ownership of a decedent's property within a reasonable time after learning of the existence of the transfer, he will be presumed to have accepted the property. Where the local law does not permit such a refusal, any disposition by the beneficiary, heir, or next-of-kin whereby ownership is transferred gratuitously to another constitutes the making of a gift by the beneficiary, heir, or next-of-kin. In any case where a refusal is purported to relate to only a part of the property, the determination of whether or not there has been a complete and unqualified refusal to accept ownership will depend on all the facts and circumstances in each particular case, taking into account the recognition and effectiveness of such a purported refusal under the local law."
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