Estate of Rickman v. Commissioner
This text of 1995 T.C. Memo. 545 (Estate of Rickman v. Commissioner) is published on Counsel Stack Legal Research, covering United States Tax Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
Opinion
*541 An order denying petitioner's Motion to Dismiss for Lack of Jurisdiction, As Amended, and petitioner's Motion to Strike will be issued.
MEMORANDUM OPINION
ARMEN,
Petitioner is the Estate of Doris L. Rickman. Doris L. Rickman (decedent) died on October 24, 1990, in Franklin, North Carolina. Decedent's husband, James R. Rickman, died on October 19, 1990, 5 days before decedent died.
Doris K. Rickman, decedent's *542 daughter, was duly appointed executrix of the decedent's estate under letters testamentary issued by the clerk of the Superior Court of Macon County, Georgia, on October 30, 1990. 2 Doris K. Rickman is also the duly appointed executrix of the Estate of James R. Rickman. At the time the petition herein was filed, Doris K. Rickman resided in Franklin, North Carolina.
On or about March 22, 1991, Doris K. Rickman filed separate Forms 709 (United States Gift Tax Return) on behalf of both James R. Rickman (Mr. Rickman) and decedent for the taxable years ending on the date of their deaths. Schedule A of Form 709 filed on behalf of Mr. Rickman lists the following gifts:
| Donee | Date | Amount |
| 1. Doris K. Rickman | 1/1/90 | $ 10,000 |
| 10/16/90 | 227,583 | |
| 2. Janet R. Tipton | 10/16/90 | 207,583 |
| 10/16/90 | 16,255 | |
| 3. James O. Tipton | 10/16/90 | 20,000 |
Janet R. Tipton and James O. Tipton are identified as decedent and Mr. Rickman's daughter*543 and son-in-law, respectively.
Form 709, lines 12 through 18, permit a taxpayer to elect to split gifts with his or her spouse as prescribed under section 2513; i.e., to have gifts made by the taxpayer and his spouse to third parties during the calendar year considered as made one-half by each. Lines 12 through 17 of the Form 709 filed on behalf of Mr. Rickman indicate that gifts made by Mr. Rickman during the taxable period would be split with decedent. In particular, decedent is identified by name and Social Security number, and it is acknowledged that Mr. Rickman was married to decedent during the taxable period, and that a gift tax return will be filed by decedent for the same period. However, line 18, which provides space for decedent's signature signifying her consent to the gift-splitting election, was not signed on decedent's behalf. The only marks on line 18 are the handwritten letters "SRB". 3
*544 The Schedule A of Form 709 filed on behalf of decedent lists the following gifts:
| Donee | Date | Value |
| 1. Doris K. Rickman | 3/22/90 | $ 10,000 |
| 2. Janet R. Tipton | 3/22/90 | $ 10,000 |
Lines 12 through 18 of the Form 709 filed on behalf of decedent indicate that gifts made by decedent during the taxable period would be split with Mr. Rickman. Line 18 of the Form 709 is signed "Kaye Rickman, Executrix".
During July 1991, Doris K. Rickman filed separate Forms 706 (United States Estate Tax Return) on behalf of both the Estate of James R. Rickman and petitioner. Schedule A of Form 706 filed on behalf of the Estate of James R. Rickman lists 7 parcels of real estate included in the gross estate as follows:
| Description | Value at date of death | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1 LOT AND BRICK HOME | $ 59,500 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Free access — add to your briefcase to read the full text and ask questions with AI ESTATE OF DORIS L. RICKMAN, DECEASED, DORIS K. RICKMAN, EXECUTRIX, Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent Estate of Rickman v. Commissioner Docket No. 13468-94 T.C. Memo 1995-545; 1995 Tax Ct. Memo LEXIS 541; 70 T.C.M. (CCH) 1335; November 16, 1995, Filed *541 An order denying petitioner's Motion to Dismiss for Lack of Jurisdiction, As Amended, and petitioner's Motion to Strike will be issued. James E. Gray, for respondent. ARMEN ARMEN MEMORANDUM OPINION ARMEN, Petitioner is the Estate of Doris L. Rickman. Doris L. Rickman (decedent) died on October 24, 1990, in Franklin, North Carolina. Decedent's husband, James R. Rickman, died on October 19, 1990, 5 days before decedent died. Doris K. Rickman, decedent's *542 daughter, was duly appointed executrix of the decedent's estate under letters testamentary issued by the clerk of the Superior Court of Macon County, Georgia, on October 30, 1990. 2 Doris K. Rickman is also the duly appointed executrix of the Estate of James R. Rickman. At the time the petition herein was filed, Doris K. Rickman resided in Franklin, North Carolina. On or about March 22, 1991, Doris K. Rickman filed separate Forms 709 (United States Gift Tax Return) on behalf of both James R. Rickman (Mr. Rickman) and decedent for the taxable years ending on the date of their deaths. Schedule A of Form 709 filed on behalf of Mr. Rickman lists the following gifts:
Janet R. Tipton and James O. Tipton are identified as decedent and Mr. Rickman's daughter*543 and son-in-law, respectively. Form 709, lines 12 through 18, permit a taxpayer to elect to split gifts with his or her spouse as prescribed under section 2513; i.e., to have gifts made by the taxpayer and his spouse to third parties during the calendar year considered as made one-half by each. Lines 12 through 17 of the Form 709 filed on behalf of Mr. Rickman indicate that gifts made by Mr. Rickman during the taxable period would be split with decedent. In particular, decedent is identified by name and Social Security number, and it is acknowledged that Mr. Rickman was married to decedent during the taxable period, and that a gift tax return will be filed by decedent for the same period. However, line 18, which provides space for decedent's signature signifying her consent to the gift-splitting election, was not signed on decedent's behalf. The only marks on line 18 are the handwritten letters "SRB". 3 *544 The Schedule A of Form 709 filed on behalf of decedent lists the following gifts:
Lines 12 through 18 of the Form 709 filed on behalf of decedent indicate that gifts made by decedent during the taxable period would be split with Mr. Rickman. Line 18 of the Form 709 is signed "Kaye Rickman, Executrix". During July 1991, Doris K. Rickman filed separate Forms 706 (United States Estate Tax Return) on behalf of both the Estate of James R. Rickman and petitioner. Schedule A of Form 706 filed on behalf of the Estate of James R. Rickman lists 7 parcels of real estate included in the gross estate as follows:
*545 The Form 706 filed on behalf of the Estate of James R. Rickman includes a statement that his entire estate passed to decedent (Doris L. Rickman) outright. The Form 706 filed on behalf of petitioner includes a Schedule A identical in all respects to the Schedule A included with the Form 706 filed on behalf of the Estate of James R. Rickman. Line 4 on the Form 706 filed on behalf of petitioner, relating to the amount of adjusted taxable gifts, is blank. On May 20, 1994, respondent issued a notice of deficiency addressed to the Estate of Doris L. Rickman, Deceased, Doris K. Rickman, in care of T. Scott Tufts, petitioner's counsel. The notice of deficiency sets forth respondent's determination of a deficiency in petitioner's Federal estate tax in the amount of $ 190,785. There is no dispute that the notice of deficiency lists decedent's correct Social Security number and date of death. The notice of deficiency includes an explanation of adjustments which states: (a) The decedent and her spouse filed Federal Gift Tax Returns for the period ending December 31, 1990, and elected to split the gifts made by each to third parties. The gift tax returns did not correctly reflect this election. *546 The adjusted taxable gift of the decedent is determined to be $ 85,711.00, rather than zero as reported at Line 4 of Page 1 of the Federal Estate Tax Return. Exhibits A and B of this notice indicate how the gift tax returns should have been filed. The corrections to the gift tax returns include the determination that all gifts by both donors must be split and that the gifts reported by the decedent's spouse were overstated because a portion of the spouse's gifts were incomplete and should not have been reported. See Item (i) of this notice for a related adjustment. Accordingly, the taxable estate is increased $ 85,711.00. (b) On the controlling valuation date (date of decedent's death) the fair market value of the real property identified at Item 1 of Schedule A of the Federal Estate Tax Return was $ 74,500, rather than $ 59,500.00 as reported. Accordingly, the taxable estate is increased $ 15,000. (c) On the controlling valuation date the fair market value of the real property identified at Item 3 of Schedule A was $ 61,000, rather than $ 47,000.00 as reported. Accordingly, the taxable estate is increased $ 14,000. (d) On the controlling valuation date the fair market*547 value of the real property identified at Item 4 of Schedule A was $ 311,580, rather than $ 250,000.00 as reported. Accordingly, the taxable estate is increased $ 61,580.00. (e) On the controlling valuation date the fair market value of the real property identified at Item 5 of Schedule A was $ 16,430, rather than $ 17,520.00 as reported. Accordingly, the taxable estate is decreased $ 1,090.00. (f) On the controlling valuation date the fair market value of the real property identified at Item 6 of Schedule A was $ 23,520, rather than $ 17,520.00 as reported. Accordingly, the taxable estate is increased $ 5,750.00. (g) On the controlling valuation date the fair market value of the real property identified at Item 7 of Schedule A was $ 16,000, rather than $ 10,260.00 as reported. Accordingly, the taxable estate is increased $ 5,740.00. (h) When the decedent died she was the sole heir of her predeceased spouse, James R. Rickman, who died on October 19, 1990. On August 8, 1990, James R. Rickman transferred $ 20,000.00 to Janet and James O. Tipton by a check which indicated that such funds were a loan on a home. It is determined that this note was part of the estate of James*548 R. Rickman which passed to the decedent and that the such loan is included in her gross estate. Accordingly, the taxable estate is increased $ 20,000.00. (i) When the decedent died she was the sole heir of her predeceased spouse, James R. Rickman, who died on October 19, 1990. On August 17, 1990, James R. Rickman directed the First Union National Bank of North Carolina to transfer two U.S. Treasury Notes totalling $ 300,000 to Kaye Rickman, Janet Tipton and James Tipton. James R. Rickman died before the bank transferred the Treasury Notes to the designated donees. Therefore, the Treasury Notes were part of the estate of James R. Rickman which passed to the decedent and the value of the Treasury Notes are included in her gross estate. Accordingly, the taxable estate is increased $ 300,000.00. In response to the notice of deficiency, petitioner filed a timely petition for redetermination with this Court. Shortly after respondent filed her answer to the petition, the parties became embroiled in both a discovery dispute and a disagreement over whether either party should be granted leave to file an amendment to their initial pleading. A hearing was scheduled in Washington, D.C., on June 28, 1995, for the purpose of resolving five pending motions stemming from these particular disputes. On the eve of this hearing, petitioner filed both a Motion to Dismiss for Lack of Jurisdiction and a Motion for Summary Judgment. 4 *550 In the meantime, by letter dated June 22, 1995, Doris K. Rickman wrote to the Internal Revenue Service District Director in Greensboro, North Carolina, and requested a written statement pursuant to Petitioner's motion to dismiss for lack of jurisdiction is premised on the theory that the notice of deficiency is invalid on the ground that respondent failed to make a valid "determination" as required by Respondent filed an objection to petitioner's motion to dismiss. Respondent maintains that the adjustments set forth in the notice of deficiency were determined based upon a review of petitioner's estate tax return, and, therefore, the notice of deficiency is valid under *552 Petitioner subsequently filed a Motion to Strike specific portions of respondent's objection. In particular, petitioner requests that we strike any reference to exhibits A and B attached to respondent's objection on the ground that petitioner was prejudiced by the fact that those exhibits were not attached to the notice of deficiency. 6 Petitioner further moves to strike that portion of respondent's objection in which respondent refers to the issue that respondent seeks to place in dispute by way of her pending Motion for Leave to File Amendment to Answer. Upon due consideration of the foregoing matter, we fail to see any meaningful prejudice to petitioner in respect of the concerns expressed in its Motion to Strike. *553 Consequently, and in view of the action that we propose to take in respect of petitioner's motion to dismiss for lack of jurisdiction, we shall deny petitioner's Motion to Strike. A second hearing was conducted in this case, again in Washington, D.C., on September 13, 1995. Counsel for both parties appeared at the hearing and presented argument in respect of petitioner's motion to dismiss. During the course of the hearing, petitioner's counsel raised an issue whether respondent's failure to comply with The issue to be decided is whether the*554 notice of deficiency issued in this case is invalid on the ground that respondent failed to make a determination within the meaning of This Court's jurisdiction to redetermine a deficiency depends upon the issuance of a valid notice of deficiency and a timely filed petition. At a minimum, a notice of deficiency must indicate that respondent has determined a deficiency in tax in a definite amount for a particular taxable year and that respondent intends to assess the tax in due course. In After invoking this Court's jurisdiction, the taxpayers filed a motion to dismiss for lack of jurisdiction. We held the notice of deficiency to be valid*556 and denied the taxpayers' motion to dismiss. In analyzing the issue on appeal, the Court of Appeals for the Ninth Circuit concluded that the Commissioner must consider information relating to a particular taxpayer before it can be said that the Commissioner determined a deficiency with respect to that taxpayer. Significantly, the courts applying The following excerpt from Before issuing a notice of deficiency pursuant to We recognized an exception to this rule in We later emphasized in After reviewing appellant's 1981 notice of deficiency, we conclude that it was sufficient to establish jurisdiction. The notice clearly indicates that appellants' PCS, Ltd., pass-through deduction of $ 12,500 was being disallowed, that their tax was being recomputed, and that a negligence penalty was being imposed. There is neither blatant error nor any statement which would suggest that the Commissioner had not made a determination using appellants' tax return. Applying the principles discussed in Petitioner contends that respondent failed to make a determination as required under We likewise reject petitioner's invitation to "carve out a narrow extension of In addition to arguing that the notice of deficiency is invalid under (a) General Rule.--If the Secretary makes a determination or a proposed determination of the value of an item of property for purposes of the tax imposed under chapter 11, 12, or 13, he shall furnish, on the written request of the executor, donor, or the person required to make the return of the tax imposed by chapter 13 (as the case may be), to such executor, donor, or person a written statement containing the material required by subsection (b). Such statement shall be furnished not later than 45 days after the later of the date of such request or the date of such determination or proposed determination. (b) Contents of Statement.--A statement required to be furnished under subsection (a) with respect to the value of an item of property shall-- (1) explain the basis on which the valuation was determined or proposed, (2) set forth any computation used in arriving at such value, and (3) contain a copy of any expert appraisal made by or for the Secretary. Initially, *564 we find it significant that *565 Finally, we observe that Congress has provided adequate remedies for taxpayers confronted with an inaccurate deficiency determination. In light of remedies such as shifting the burden of proof to respondent and/or awarding litigation costs, petitioner's call for an expanded substantive review of the matters leading to respondent's determination is unwarranted. See Consistent with the foregoing, we shall deny petitioner's motion to dismiss for lack of jurisdiction. To reflect the foregoing, Footnotes
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