The ResurrectionThe Resurrection
As practitioners are acutely aware, the Internal Revenue Service has pursued a variety of arguments during the past decade to attack family limited partnerships (FLPs). The IRS has deployed Internal Revenue Code Sections 2036, 2701, 2702 and 2704, plus indirect gift arguments, as well as the business purpose and economic substance doctrines. (See Many Fronts, p. 22.) Recently, though, the Service
Edward A. Renn & N. Todd Angkatavanich
As practitioners are acutely aware, the Internal Revenue Service has pursued a variety of arguments during the past decade to attack family limited partnerships (FLPs). The IRS has deployed Internal Revenue Code Sections 2036, 2701, 2702 and 2704, plus indirect gift arguments, as well as the business purpose and economic substance doctrines. (See “Many Fronts,” p. 22.)
Recently, though, the Service resurrected arguments long thought dead. In Holman v. Commissioner,1 the U.S. Tax Court handed a victory to the IRS' Section 2703 attack on an FLP. The May 2008 decision caught some practitioners by surprise. After all, the IRS had made Section 2703 arguments against FLPs in a number of cases back in the la...
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