Cahill, Powell and the Ongoing Evolution Of IRC Section 2036(a)(2)Cahill, Powell and the Ongoing Evolution Of IRC Section 2036(a)(2)
Ruling makes split-dollar arrangements less attractive and potentially impacts other planning techniques.
In Estate of Richard E. Cahill, et al. v. Commissioner,1 the Tax Court denied partial summary judgment to an estate that contested a deficiency notice in which the Internal Revenue Service adjusted the value of the decedent’s rights in three split-dollar life insurance arrangements from $183,700 to more than $9.61 million. The court declined to grant partial summary judgment on the estate’s arguments that Internal Revenue Code Sections 2036, 2038 and 2703 didn’t apply to the split-dollar arrangement and that Treasury Regulations Section 1.61-22 did apply in valuing the decedent’s interest in the split-dollar arrangements for estate tax purposes.
Although this case only denies the estate partial summary judgment regarding the IRS’ argumen...
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