In Palmwood Holdings, LLC v. Comm’r, the United States Tax Court granted partial summary judgment in favor of the IRS, holding that the Service satisfied the supervisory approval requirement of section 6751(b) with respect to a civil fraud penalty first asserted in the IRS’ answer. The decision reinforces a growing body of Tax Court precedent…
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Use of irrevocable trusts is common in a number of planning scenarios – tax planning, estate planning, business succession, Medicaid qualification, asset protection, etc. Just like there are several reasons irrevocable trusts are created, there can be reasons why a trust may be terminated before the expiration of the term stated in the trust agreement.[1]…
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Undue influence disputes[1] often involve no allegations of overt fraud, coercion, or incapacity, instead turning on the fairness of transactions that occur within confidential relationships. A recent Mississippi Court of Appeals’ decision[2] provides a clear illustration of how courts analyze these disputes and why the burden imposed on a beneficiary who occupies a position of…
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Two different cash advances from a mother to a son highlight when a purported loan will be respected as such for tax purposes. One case is Estate of Bolles,[1] which is an opinion I wrote about previously.[2] The other case is Estate of Galli.[3] The outcomes of the two cases are opposites – one finding…
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A recent Tax Court memorandum opinion[1] presents a thorough illustration of the Court’s approach to valuation disputes in syndicated conservation-easement transactions. As is historically typical in these transactions, the case involved a partnership interest sale shortly before the donation and an associated appraisal asserting a dramatic increase in value when compared to the original purchase…
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In a recent Tax Court case, the Tax Court upheld the IRS assessments against the taxpayer (though he would not call himself that) for unreported income and failure to file, and even assessed sanctions under IRC 6673 for advancing frivolous arguments.[1] However, as discussed below, he was able to avoid the accuracy related penalty under…
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Estate disputes often rest on a fragile balance between testamentary intent and certain legal safeguards that protect vulnerable testators from improper third-party influence[1]. A recent decision[2] by the Mississippi Court of Appeals highlights this delicate balance and provides commentary on Mississippi’s treatment of undue influence, the role of witness credibility, and the evidentiary burdens faced…
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The Mississippi Supreme Court recently revisited the intersection of family law and probate.[1] The decision offers a reminder that alimony obligations, while enforceable during a recipient’s life, remain subject to statutes of limitation and proper crediting principles that can determine whether an estate owes anything at all. The case at hand offers an interesting twist…
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What rights do creditors have to a beneficiary’s interest in an irrevocable trust? There are a number of misconceptions related to this common question, and further, the law varies from state-to-state. However, there are some generally applicable concepts to consider in determining whether a creditor can access the rights of a beneficiary to an irrevocable…
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Prenuptial agreements, having long been viewed between a frame of practicality and social hesitation, have steadily gained traction as couples seek to define their financial rights and obligations before entering marriage. In Mississippi, these agreements carry significant practical and legal weight, but unlike many states, Mississippi has not adopted the Uniform Premarital Agreement Act. Instead,…
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