Recent Microcaptive Case Undermines Promoted Structure

A recent Tax Court decision underscores an increasingly rigorous examination of Section 831(b) microcaptive insurance arrangements.[1] This ruling may be insightful to taxpayers considering or currently operating microcaptives, has broad implications for businesses seeking legitimate tax incentives created by Congress. Overview of the Case The case at hand involves the Internal Revenue Service’s (“IRS”) rejection…
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Weston v. Comm’r: A Cautionary Tale on Loss Deductions and Tax Compliance

In a recent Tax Court decision, the Court again approached the critical issues surrounding loss deductions and tax compliance.[1] This case involves Heather and Stewart Weston, a married couple from California, who claimed a $2.1 million loss deduction on their 2017 tax return tied to failed business ventures in Indiana. The Internal Revenue Service (“IRS”)…
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McDougall v. Commissioner: Navigating the Complexities of QTIP and Gift Tax

The recent Tax Court decision in McDougall v. Comm’r, 163 T.C. No. 5 (2024) provides important insights into the intersection of Qualified Terminable Interest Property (QTIP) trusts and the associated gift tax implications. This article delves into the case’s facts, legal issues, court holdings, and practical implications for estate planners and tax professionals. Factual Background…
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Legacy Contacts and Digital Supplementation to your Estate Planning

As of the release of iOS 15.2, December 13, 2021, Apple released a new feature for its users, “Legacy Contacts”.[1] Historically, estate fiduciaries could receive this information with a court order, but the new process is designed to minimize the expense of time and money associated with getting access to a decedent’s account information. So,…
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Navigating Gift Tax and QTIP: A Landmark Case

In a recent decision, the Tax Court addressed the complexities of gift tax and qualified terminable interest property (“QTIP”) rules, providing important insights for estate planning professionals and taxpayers alike.[1] The case centered on the interpretation of provisions related to the taxation of transfers between spouses, and in this context, termination of QTIP interests and…
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Crider Trust Case – The Case for the Cautious Fiduciary

On February 8, 2024, the Mississippi Supreme Court issued its opinion[1] regarding an issue of first impression regarding Mississippi’s Principal and Income Act of 2013 (the “Act”).[2] As a worthwhile note, the Court noted that this is an issue of first impression and acknowledged as well as appeared to oblige the parties so as to…
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ETA 2026 – Switching from Inclusion to Exclusion Planning for the Estate Tax

Currently (and since the Tax Cuts and Jobs Act of 2017), we, like many other practitioners, have seen an incredible uptick in inclusion planning[1] instead of the traditional exclusion planning (getting assets out of one’s taxable estate). A primary driving force for this major shift was the essential doubling of the estate tax exemption (from…
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Evaluating the Landscape: Impact of CIC Services, LLC Case on Attorneys’ Fees and Government Fairness

The recent opinion from the United States District Court, Eastern District of Tennessee, continues the saga of the case of CIC Services, LLC (“CIC”) and has implications for taxpayers seeking to recover attorneys’ fees under the Equal Access to Justice Act (“EAJA”) and for its broader reflections on governmental fairness, particularly those looking to challenge…
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