Family business consulting revisited.
* The SBJPA and the TRA '97 have enormously liberalized the use of ESOPs by S corporations.
* Estates and beneficiaries are now related parties for Sec. 267 purposes.
* There has bee increased IRS scrutiny of discounts on transfers of FLP interests between family members.
The widespread existence of family-owned businesses mandates that practitioners keep up with developments in this area, including family aggregation, valuation discounts, qualified plan testing, split-dollar life insurance and employee stock ownership plans. This article highlights recent law changes in these areas as they affect family business consulting.
This article is a sequel to one published in The Tax Adviser in 1993 titled "Family Business Consulting,"(1) which explored many of the related-party rules affecting family business transactions. Since the publication of that article, several critical developments have occurred, including the following:
* The issuance of Rev. Rul. 93-12,(2) in which the IRS acquiesced in a long line of cases holding that the value of business interests in property transferred to family members must be determined without regard to the relationship between the buyer and seller or whether the business or other property is controlled by the family as a unit; there is no family aggregation when determining the value of gifted property.
* The Small Business Job Protection Act of 1996's (SBJPA's) repeal of family aggregation rules for most purposes in qualified plans, having both positive and negative effects when planning for retirement benefits in family businesses.(3)
* The addition of an "estate and its beneficiaries" to the list of related parties to or from whom loss recognition on the sale of depreciable property is disallowed under Sec. 267.(4)
* The issuance of Letter Rulings 9636033(5) and 9745019,(6) sanctioning the use of split-dollar life insurance arrangements in intrafamily transactions.
* The liberalization of the ESOP rules for S corporations and the planning implications for family businesses.(7)
* Increased IRS scrutiny of discounts on transfers of family limited partnership (FLP) interests between family members.(8)
Why Are Family Businesses Different?
Although much has been written about conflict in family businesses and the problems of perpetuating a business from one generation to the next, Congress continues to believe that close personal relationships between family members allow them to "collude" for tax savings in ways that unrelated parties cannot. For this reason, the Code contains a ceaseless array of related-party rules. Although some rules--particularly Secs. 318 and 267--are multipurpose, many Code sections have their own aggregation rules. This creates tremendous complexity, which makes it difficult to plan for transactions between and among family members and between family members and their business. On rare occasions, a showing of family hostility can negate the effect of family attribution(9); however, most family attribution is statutory and not subject to mitigation.
Valuation and Family Aggregation
The Service has long been hostile to the use of lack of marketability and lack of control discounts when the transferor and the transferee are family members. Its position has been that there is no lack of control if the transferor controlled the entity before the transfer and transfers are solely to family members.
The courts have almost uniformly held otherwise. For example, in Bright(10) and its progeny, the courts noted that the concept of a willing buyer and a willing seller (found in Rev. Rul. 59-60(11)), which governs valuation issues for tax purposes, does not contemplate whether the parties are related. The appropriate way to value business interests under that ruling is to ascertain what a willing buyer in the market would pay for the asset being transferred and what a willing seller, not under any compulsion to sell, would sell it for. After a long string of government losses, and the possibility of having to pay attorney's fees and costs to taxpayers litigating this issue, the IRS issued Rev. Rul. 93-12.
That ruling, however, is not a complete capitulation. Ever since its issuance, the IRS has sought other ways to deny discounts on transfers between family members. In Murphy(12) and Letter Ruling (TAM) 9723009,(13) among others, gifts were made by a parent to children very shortly before the former's death. In Murphy, the decedent had owned 51% of a closely held corporation. For years, she had been counseled by her advisers to gift sufficient shares to her children to bring her ownership to under 50%. Finally, 18 days before death, she made gifts bringing her ownership down to 49.65%; on her estate tax return, the executor claimed a significant discount for the decedent's remaining minority interest. The court viewed this as a tax move with no business purpose; it concluded that the discounts for lack of control and minority interest were invalid in light of the late date of the transfers.
Murphy was decided before the issuance of Rev. Rul. 93-12. The IRS subsequently issued Letter Ruling (TAM) 9736004,(14) among others, in which it followed Murphy to bar deathbed discounts. However, Frank(15) shows that this issue is far from settled.
Having failed to introduce a family attribution concept to the valuation of gifts and other transactions in property between and among family members, the IRS has put forth a new theory; if a gift carries "swing vote attributes," no discount applies. In Letter Ruling (TAM) 9436005,(16) a parent had made gifts to each of his three children of approximately 30% of the voting common stock of a family business; he also transferred 5% to his spouse and retained 5%. The parent fried a gift tax return claiming minority and marketability discounts for the gifted shares. The IRS determined that because two children together could effectively control the company, each had a "swing vote" that was more valuable than the typical minority interest; thus, it concluded that there should be no lack-of-control discount. Additionally, if the gifts had been made serially, rather than simultaneously, by putting two children in a position of having a "swing vote" a gift to the second child would constitute a gift to the first child of the discount taken on the first gift. In support of this theory, the IRS cited Winkler.(17)
In extreme situations, a swing-vote attribute could negate a minority interest discount. For example, if all ownership interests carry the same relative voting rights and there are two 48% owners, a transfer of a 2% voting interest may not be entitled to a discount because of its leverage value in dealing with either 48% owner. Whether a transfer of the 2% interest would constitute a gift to the 48% owner who received his interest by gift, in the amount of the discount taken on the original gift, is a concept not completely accepted in the appraisal community.
Recently, the IRS put forth the swing-vote argument in Furman.(18) The Tax Court never reached the merits of that case, because it found that the blocks of stock to be valued and those gifted did not have swing-vote attributes. Obviously, however, the IRS still views this as a viable issue in the valuation area. In any event, careful planners should be able to avoid the swing-vote problem by using nonvoting interests for gifting and other techniques, including careful timing of gifts.
Chapter 14 Developments
As stated above, the IRS has been hostile to structures established merely to take discounts, with no apparent other business purpose. One such situation is the FLP created to hold investments and other personal assets merely for tax purposes. While the IRS is alarmed at the use of discounts to reduce transfer tax, it sometimes ignores legitimate reasons why families set up partnerships and limited liability companies (LLCs), including the ability to centralize control over family assets, provide asset protection and protect the family business against attacks by unscrupulous litigants. In addition, FLPs can lower management costs (by pooling assets) and foster philanthropy and family unity. Initially, the IRS attacked such partnerships as having no business purpose (i.e., they were not partnerships). It did so by issuing regulations under Sec. 701 dealing with anti-abuse in the partnership tax area. However, because these regulations had transfer tax implications, they were overreaching. An outcry from both practitioners and taxpayers caused the IRS to retract a portion of these regulations, but did not change the IRS's attitude about these types of entities. Most practitioners accept that a FLP must have a business purpose to achieve the desired tax results.
In the last few years, practitioners have become increasingly aggressive in setting up FLPs, partly to take advantage of discounts on gifting. The IRS has encountered a number of situations it deems abusive; it has attempted to curb them through cases, letter rulings and TAMs. The areas that seem to most concern the IRS are (1) deathbed transfers, in which a transaction appears to be motivated solely by estate tax reduction considerations and (2) situations involving cash and marketable securities, in which the IRS does not believe that discounts should apply.
Example: X and Y, ages 65 and 62 respectively, have three children, all married and in their 30s. They have two grandchildren, both under age five. X's and Y's combined estates total $5,000,000; included in that figure is a $2,000,000 parcel of undeveloped land and $1,000,000 in marketable securities. The estate tax on the estate of the second of them to die will be about $1,600,000; if the assets appreciate in value between now and their deaths, the appreciation will be taxed at 55%. They wish to make gifts of some of their property to their children and grandchildren. If they transfer the land and securities to a FLP in exchange for general and limited interests, there will be no income tax consequences on formation. If they transfer limited interests to their heirs, the value of such interests may be discounted. Assuming a 40% discount is justified, and the FLP's underlying property is worth $3,000,000, X and Y may each transfer 33% of the value of the FLP to their children and grandchildren. Valued before discounts (and taking into account only the underlying property), each parent will have gifted $1,000,000 in value; but for transfer tax purposes, only the FLP interests (not the underlying property) is being valued, resulting in a deemed gift of only $600,000 in value (after a 40% discount). Thus, $400,000 of value will not have been deemed gifted for transfer tax purposes; using a 55% tax rate, $440,000 (($400,000 X 0.55) X 2) of transfer tax is avoided.
For deathbed transfers, the IRS has used the same approach as in Murphy. In Letter Ruling (TAM) 9736004, shortly before death, the donor created a FLP with investment and passive-type assets and transferred FLP interests to heirs, taking a discount for gift tax purposes. The IRS found this to be a tax-motivated device and denied the use of discounts. The Service's position is clear--for these types of transactions, the time frame can make a difference. The longer a transaction has to ferment, the greater the possibility of it succeeding (i.e., there is a greater chance it will not be viewed as tax-motivated).
Secs. 2703 and 2704
Chapter 14 includes Sacs. 2701-2704. Secs. 2703 and 2704 involve arrangements and agreements with terms that would cause an appraiser to reduce valuation for gift tax purposes. In attacking valuation discounts in family transfer situations, the Service initially put forth an argument under Sec. 2704 that provisions in agreements that are more restrictive than state law are disregarded in valuing the transferred interest.
Example: F and W live in State X. Under the law of that state, a limited partner has the right to liquidate his interest at fair market value (FMV). F and W transfer raw land to a FLP in exchange for general and limited partnership interests. The partnership agreement states that no partner has the right to force partnership liquidation or have his interest redeemed without the consent of 75% of the partners. After transferring $1,000,000 of land to the partnership, F transfers 25% of his limited partnership interest (worth $250,000) to his daughter, P. However, because the partnership agreement restricts P's right to liquidate the entity, F believes that a willing buyer would pay only 70% of the liquidation value. For gift tax purposes, the value of the limited partnership interests transferred is $75,000 less than the liquidation value. Because state law is less restrictive than the partnership agreement and P and F are related, the IRS's argument is that the restrictions in the agreement are to be ignored for valuation purposes; thus, Sec. 2704 precludes the discount and prevents F from using a lower value for gift tax purposes.
Practitioners very quickly lobbied state legislatures to change state laws, so that limited partners did not have the right to force liquidation and receive FMV. This effectively negated the IRS's attack under Sec. 2704 in most states, at least for FLPs formed after the law changed. A similar experience has occurred for LLC statutes.
The IRS then turned to Sec. 2703, which was intended to attack arrangements such as options and buy-sell agreements between family members that purported to fix value for transfer tax purposes, but were merely a tax-motivated device to pass ownership of a business to family members. While practitioners agree that Sec. 2703 applies to the standard buy-sell agreement, they generally do not agree that it is applicable to FLP agreements. Sec. 2703 could be construed to encompass the standard FLP agreement, which restricts transferability and the ability to liquidate an ownership interest. The legislative history(19) indicated that that was not intended, and there have been no rulings or cases on point. However, in White,(20) the IRS offered the Sec. 2703 argument in its examination report. The taxpayer in that case moved for summary judgment, attempting to dispel that argument and make certain constitutional arguments that the transfer tax on death is a prohibited tax on a tax. For unknown reasons (that one could speculate), the IRS chose to allow the case to be dismissed and did not respond to the taxpayer's arguments. This does not mean that the IRS has given up the argument. Instead, it is likely that it has chosen to fight this battle another day. For practitioners who will continue to use FLPs as a technique to obtain valuation discounts on transfers in family situations, clients should be advised that the IRS may be on the warpath.
Qualified Plan Family Aggregation Repealed
Before SBJPA Sections 1431(b) (1)-(3), amending Secs. 414(q)(6), 401(a)(17) and 404(1), a series of family aggregation rules were imposed on qualified plans. These rules treated the spouses and certain children of highly compensated employees (HCEs), working in the same business, as one person for qualified plan purposes. In Sec. 40 l(k) plans and cash or deferred simplified employee pensions, the aggregation rule treated spouses and children (of any age) as one person when testing the average deferral percentage (ADP) and average contribution percentage (ACP). At one point, such persons were tested both together and separately; the test that resulted in less taxpayer-favorable treatment was required to be used. This was later changed to require testing as one person. The SBJPA eradicated family aggregation for this purpose.
In addition, another aggregation rule treated spouses and children under age 19 working in the family business as one person in testing compensation limits and for deduction purposes. The compensation cap limited the amount that could have been contributed to a qualified plan in a family-owned business on behalf of all family members. Even though the SBJPA repealed the family aggregation rules, the limit on overall compensation for plan purposes still applies to individual participants in qualified plans.
The repeal of family aggregation is a welcome change for some family businesses, but a disadvantage for others. One of the major benefits is that it simplifies plan testing and creates opportunities for family business planning.
In the qualified plan area, the repeal of family aggregation should trigger the employment of spouses and other family members to help increase the amount the business owner can contribute on his own behalf. Because the ADP and ACP tests now count each employee equally, regardless of compensation level, family business owners will (in some cases) pay family members for work in the business (even if nominal amounts), and have them not contribute to the plan. This could greatly lower the ADP and ACP of HCEs and should allow the owner to significantly increase his contribution, even if the rank-and-file employees defer very little income. A family business owner who defers 8% of pay and is the only HCE can add his spouse to the payroll; if the spouse opts out of the plan, the HCE ADP will decrease to 4%. This can help avoid cutbacks in the owner's contribution. If the new safe harbor rules are used instead, spouses and other family members can be put on the payroll, defer large amounts of pay and, help the family contribute much more without violating Sec. 401 (k) plan testing.
In the non-Sec. 401(k) area, if husband/wife or parent/child teams earn in excess of the compensation limit ($160,000 for 1998, under Sec. 401(a)(17)(21)), the repeal of family aggregation will likely increase the maximum amount that may be contributed for the family as a whole.
However, in the cross-testing area, sanctioned under Regs. Sec. 1.401(a)(4)-(8), the repeal of family aggregation may be positive in some situations and negative in others.
Example: D, age 65, and his son, S, age 30, work in the same business and earn relatively equal compensation. Pre-SBJPA, they would have been tested as one individual, age 47. If many of the rank-and-file employees are under age 47, but over age 30, D and S might have received a greater aggregate contribution under family aggregation than when tested as separate employees.
The repeal of family aggregation is beneficial if F and S agree that one of them will not participate in the plan. By excluding an HCE, the percentage of non-HCEs that must be covered goes down. This can allow the company to exclude more employees and reduce plan costs.
It is difficult to predict the effect the SBJPA changes will have on plan design and existing plans in general without completing calculations. It is clear, however, that the repeal of family aggregation is not always beneficial.
Shortly after the SBJPA's passage, the IRS took the position that a plan could not operate as if family aggregation had been repealed unless and until the plan was amended. This was quite a shock to practitioners. After months of discussion, the IRS issued Rev. Proc. 98-42,(22) which indicated that profit-sharing and money-purchase pension plans may operate in accordance with the repeal and be amended later, within the remedial amendment period. However, the procedure perpetuates the IRS's original position on defined benefit plans; such plans must continue to apply family aggregation until amended. Some defined benefit plans have been drafted to take this law change into account; most will likely need an amendment. In some cases, a quick amendment can be adopted now and submitted to the IRS for approval later. If a master prototype plan has been used, this will probably not be possible. Because there are relatively few defined benefit plans left in family businesses, this will probably not be much of a problem; however, it is difficult to understand why the IRS believes this to be such an important issue and why money-purchase and defined benefit plans have been distinguished.
Related-Party Loss Disallowance Rules
In the 1993 article, the Sec. 267 related-party loss disallowance rules were discussed at length. That article noted that when one family member sells an asset to another at a loss, the loss is not currently deductible, under Sec. 267; instead, the built-in loss carries over to the asset in the hands of the recipient family member, who will recognize less gain when that asset is ultimately sold outside the family. For this purpose, "related parties" include parents and grandparents, children, grandchildren and spouses, but not siblings; also excluded are in-laws (e.g., a son- or daughter-in-law). Related parties also include a transferor's corporation, partnership, LLC or trust.
However, not included among the list of related entities was the estate of a deceased individual and his beneficiaries. This loophole created an opportunity for an estate to sell assets to beneficiaries who would otherwise ultimately receive the assets or the sale proceeds and generate income tax losses that could be used currently against the estate's income. TRA '97 Section 1308(a) amended Sec. 267(b), effective for tax years beginning after Aug. 5, 1997. In addition, gain on the sale of depreciable property between an estate and a beneficiary is no longer treated as capital gain, as Sec. 1239 was similarly amended by TRA '97 Section 1308(b). These rules do not apply to gains or losses realized in satisfaction of a pecuniary bequest.
In recent years, employee stock ownership plans (ESOPs) have been used by family businesses to provide (1) an exit strategy for a family business owner, (2) a succession plan when children and/or management will succeed the founder or (3) a way to motivate employees. In a C corporation ESOP, generally under Sec. 1042, an owner can sell company stock to the ESOP; if after that transaction, the ESOP owns at least 30% of the corporation's stock, the owner can reinvest the sales proceeds in securities of one or more domestic operating companies and defer the income tax on the gain. If the owner holds that portfolio of securities until death, the basis step-up will permanently eliminate the income tax on the original sale.
The ESOP may purchase the stock from the shareholder with funds borrowed from a bank or other institution. The corporation will annually contribute to the ESOP sufficient funds to pay interest and principal on the loan. The contributions are deductible under Sec. 404(a)(9); thus, the company's buyout of the shareholder is deductible. In certain cases, dividends deductible under Sec. 404(k) (2)(A) (iii) may be paid by the corporation and used to pay interest on the ESOP loan, or the limits on qualified plan contributions can be increased to facilitate the larger contributions necessary to pay off an ESOP loan.
Because of the tremendous tax shelter offered by ESOPs, many family-owned businesses have used them to buy out one or more family member-shareholders. In the past, the greatest single impediment to the formation of ESOPs for family-owned businesses was that ESOPs could not own S corporation stock without terminating the S election. The SBJPA and the TRA '97 completely liberalized the rules for ESOPs sponsored by S corporations (SESOPs). A SESOP can own S stock without terminating the S election. In addition, the income allocable to the ESOP shareholder via a Form K-I from the S corporation is not subject to tax.
The only significant difference between a SESOP and a C ESOP is that if an S shareholder sells his stock to the SESOP, a Sec. 1042 rollover is not available. Despite this, the new rules should help to proliferate the use of SESOPs; a family business can obtain a deduction by issuing new stock and contributing it to the SESOP. Although a Sec. 1042 deferral is not available, other family members and key individuals can participate in the allocation of the newly issued S stock in the SESOP to their participant accounts.
The new SESOP rules create several planning opportunities, some of which have yet to be fully explored.
Example: T, a shareholder of a C corporation, sells more than 30% of his C stock to the corporation's ESOP and rolls the proceeds over under Sec. 1042. Shortly thereafter, the corporation elects S status. This allows T to roll over his gain and the corporation to reap the benefits of S status. If the corporation was always an S corporation, it could convert to C status, have T make the Sec. 1042 election, then make another S election after five years. However, if there is a more-than-50% change in ownership of the ESOP, the corporation may be able to reelect S status before five years.
Another planning opportunity arises in the case of a one-person corporation or one with very few employees. The corporation could be an S corporation with a SESOP that accepts newly issued stock; the corporation would be entitled to a deduction for the FMV of the stock contributed to the SESOP. Those shares would be allocated to participant accounts, primarily those of the 100% owner and/or his family members. The SESOP, which owns a significant number of shares, can receive its allocable portion of the corporation's income tax-free. Because the majority of the shares will be allocable to the current owner and/or his family, more income will be sheltered in the qualified plan.
Because the SESOP rules are new, practitioners should be careful to explore all of the tax and prohibited transaction rules before going forward with either of these plans.
Family Split-Dollar Plans
In Letter Rulings 9636033 and 9745019, the IRS ruled that a split-dollar life insurance arrangement can be used in a family setting without adverse consequences. This is the first indication by the IRS that the family split-dollar arrangement is valid.
In Letter Ruling 9636033, a taxpayer created an irrevocable life insurance trust; the trustee applied for, owned and was the beneficiary of a life insurance policy on the grantor's life. The trustee entered into a split-dollar agreement with the spouse of the insured-grantor. The spouse owned the cash value of the policy and agreed to pay the bulk of the premium. The trust owned the term portion of the policy and paid the smaller portion of the premium. The arrangement provided that on death or policy termination, the spouse would receive the cash value; any remaining balance would be paid to the trust.
The Service ruled that as long as the trust paid the cost of the economic benefit for insurance coverage for a one-year term and the spouse paid the rest, there would be no gift or estate tax consequences. In Letter Ruling 9745019, this rationale was extended to a properly structured second-to-die insurance policy. The emphasis is on "properly structured"; there are many ways to stumble in the use of second-to-die policies in this context, so practitioners must be careful.(23)
The primary benefit of family split-dollar is a reduction in the gift made to pay the premium. In Letter Ruling 9636033, the spouse paid the bulk of the premium, while the trust paid the smaller portion. However, when the policy pays off, the bulk of the proceeds will go into the trust, outside of the decedent's estate.
Example: G, age 50, creates a trust; an insurance policy purchased by the trust calls for a $60,000 annual premium. A Crummey(24) power will be used to give G a Sec. 2503(b) $10,000 annual gift tax exclusion. If there are three Crummey beneficiaries, G and his spouse can contribute $60,000 to pay the premium each year and not incur a taxable gift. However, there can be no further present-interest gifts to the same donees without incurring a taxable gift, which severely limits G's estate planning options. In addition, many taxpayers find the insurance premiums to be even higher than the total present-interest exclusions available, even with the help of the spouse. By using a family split-dollar arrangement, the insurance premiums paid by the trust will be much lower; thus, the gifts into the trust will be reduced, solving the problem.
GST Tax Implications
In the generation-skipping transfer (GST) tax planning arena, the results can be even more dramatic.
Example: The facts are the same as in the above example, except that the Crummey beneficiaries are G's three grandchildren. If $60,000 of gift tax exclusions are used via this trust, the GST tax exemption is being used dollar-for-dollar for every dollar contributed to it, because the Crummey power does not exempt transfers from the GST tax. For G, age 50, it will take 17 years to fully use his GST tax exemption; thus, at age 67, G may have to pay GST tax. Even if G's spouse joins in the gifts and agrees to let her GST tax exemption be used, it is not inconceivable that both GST exemptions will be fully used and GST tax will be payable before the policy pays ofF.
By using a family split-dollar arrangement, the gifts into the trust will be reduced, because the cost of the term portion (borne by the trust) will be low. The lower the cost, the lower the required gift and the less the use of the GST exemption. Using the family split-dollar technique, it is possible that the taxpayer will never run out of GST tax exemption.
Further, the irrevocable insurance trust can be made into a dynasty trust. This type of trust is designed to skip multiple generations, not just the generations before the living grandchildren. By skipping multiple generations, a donor avoids several levels of 55% estate taxation on his assets as they are passed from generation to generation. With the split-dollar arrangement, this can be done without exceeding the GST tax exemption and without unnecessarily using it.
The family business arena continues to be a satisfying and challenging practice area. It is ever-changing and requires constant attention. It is a niche practice area on which professional advisers should focus; the considerations highlighted in this article are certainly a part of it.
(1) Zwick, "Family Business Consulting," 24 The Tax Adviser 3 (January 1993).
(2) Rev. Rul. 93-12, 1993-1 CB 202.
(3) SBJPA Section 1431(b)(1)-(3), amending Secs. 414(q)(6), 401(a)(17) and 404 (l).
(4) Sec. 267(b), as amended by the Taxpayer Relief Act of 1997 (TRA '97), Section 1308(a); Sec. 1239(b), as amended by TRA '97 Section 1308(b).
(5) IRS Letter Ruling 9636033 (3/12/96).
(6) IRS Letter Ruling 9745019 (8/8/97).
(7) See Diamond, "S Corps. and ESOPs--Perfect Together," p. 46, this issue.
(8) See Strobel, "Refuting IRS Challenges to the Use of FLPs," p. 28, this issue.
(9) See, e.g., Robin Haft Trust, 510 F2d 43 (1st Cir. 1975)(35 AFTR2d 75-650, 1975-1 USTC [paragraph] 9209).
(10) Est. of Mary Frances Smith Bright, 658 F2d 999 (5th Cir. 1981)(48 AFTR2d 81-6292, 81-2 USTC [paragraph] 13,436).
(11) Rev. Rul. 59-60, 1959-1 CB 237.
(12) Est. of Elizabeth B. Murphy, TC Memo 1990-472.
(13) IRS Letter Ruling (TAM) 9723009 (2/24/97).
(14) IRS Letter Ruling (TAM) 9736004 (6/6/97).
(15) Est. of Anthony J. Frank, Sr., TC Memo 1995-132.
(16) IRS Letter Ruling (TAM) 9436005 (5/26/94).
(17) Est. of Clara S. Roeder Winkler, TC Memo 1989-231.
(18) Maude G. Furman, TC Memo 1998-157.
(19) See S. 3209, 101st Cong., 2d Sess. (1990), p. 67.
(20) Est. of Elaine Smith White, TC Dkt. No. 14412-97; this case was dismissed on taxpayer-favorable terms.
(21) Notice 97-5, IRB 1997-45, 7.
(22) Rev. Proc. 98-42, IRB 1998-28, 9.
(23) For a discussion, see Swanson, "Is Split-Dollar Life Insurance Still a Fringe Benefit?," 29 The Tax Adviser 42 (January 1998).
(24) D. Clifford Crummey, 397 F2d 82 (9th Cir. 1968) (22 AFTR2d 6023, 68-2 USTC [paragraph] 12,541), aff'g and rev'g TC Memo 1966-144.
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|Title Annotation:||tax planning|
|Author:||Zwick, Gary A.|
|Publication:||The Tax Adviser|
|Date:||Jan 1, 1999|
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