Procedurally Taxing: How to Apply the Gross Valuation Misstatement When a Gift is a Sham (February 3, 2021)

Leslie Book, of Villanova University – Charles Widger School of Law, discusses Fakiris v Commissioner and its supplemental opinion.

With the IRS urging a taxpayer friendly interpretation of the valuation misstatement penalty, the procedural posture of Fakiris is somewhat unusual. To be sure, the IRS could effectively disregard the Tax Court’s reasoning and choose to apply penalties regime consistent with what its position on reconsideration. Under Fakiris 1 and 2 if a purported charitable contribution is disallowed due to a finding that restrictions placed on the donee effectively render an initial gift or contribution as incomplete the effect is likely an automatic 40% penalty.

To see the full article, click: “How to Apply the Gross Valuation Misstatement When a Gift is a Sham”.

To download the full opinions, click: Fakiris 1 and Fakiris 2.

Posted by Elise Kim, Managing Associate Editor, Wealth Strategies Journal.

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