Opinion ID: 2733037
Heading Depth: 2
Heading Rank: 3

Heading: Proceedings Prior to Tax Court Litigation

Text: Decedent died testate in February 2006. His will was probated in Harris County, Texas, and his three children qualified as co-executors. 4 The Decedent’s Estate Tax Return, Form 706, was filed the following May, 4 Decedent’s son, who was one of the three co-executors, died unexpectedly in June 2010, after which his two sisters, Petitioners herein, continued to serve as the Independent Executors of Decedent’s estate. 5 Case: 13-60472 Document: 00512768979 Page: 6 Date Filed: 09/15/2014 No. 13-60472 reporting a tax liability in excess of $102 million. It listed, among other assets, fractional interests in various items of real and personal property, including his 73.005 percent interest in the Disclaimer Art and his 50 percent interest in the GRIT Art. 5 Following its audit of the estate tax return, the Internal Revenue Service (“IRS”) accepted net values that remained after deducting various fractionalownership discounts on essentially every property, real and personal, in which Decedent owned a fractional interest, with but one exception: the 64 works of art. The IRS refused to allow any discount against the Decedent’s pro rata share—his fractional-ownership interest—of the stipulated FMVs of these works. The IRS assessed an estate tax deficiency of $9,068,266.