Court Opinion

ID: 4472737
Source: CourtListenerOpinion
Date Created: 2020-01-14 19:34:53.076998+00
Date Added: 2024-06-11T12:00:45.746095
License: Public Domain

Beghe, J., concurring: My first reaction to the case at hand was that this Court’s prior views, as expressed in our opinions in Estate of Robertson v. Commissioner, 98 T.C. 678 (1992), revd. 15 F.3d 779 (8th Cir. 1994), Estate of Clayton v. Commissioner, 97 T.C. 327 (1991), revd. 976 F.2d 1486 (5th Cir. 1992), and Estate of Spencer v. Commissioner, T.C. Memo. 1992-579, revd. 43 F.3d 226 (6th Cir. 1995), have the better of the arguments on the literal interpretation of the statutory language. I also had (and continue to have) reservations about the views, expressed by three Courts of Appeals, whose adoption would require us to invalidate section 20.2056(b)-7(d)(3), Estate Tax Regs., effective for estates of decedents dying after March 1, 1994. Cf. Estate of Shelfer v. Commissioner, 103 T.C. 10, 28 n.6 (1994) (Beghe, J., dissenting). On reflection, I think I see a principled justification for changing my position on the merits. As explained in my dissent in Estate of Shelfer, QTIP is an exception to an exception that deserves a liberal construction. 103 T.C. at 26. This is particularly so in the Estate of Clayton, Estate of Robertson, and Estate of Spencer situation, as in the case at hand, because there is no loophole. Although I agree with Judge Parker that executors don’t need the post mortem planning flexibility to choose who actually gets the property, dissenting op. p. 158, I don’t think that should be our concern; the QTIP election mechanism assures that the property will be included in the estate of one spouse or the other.1  Another question raised by the case at hand is whether, in the light of Central Pa. Sav. Association & Subs. v. Commissioner, 104 T.C. 384 (1995), we should have stuck to our guns in the face of reversal by three Courts of Appeals. One difference between the case at hand and Central is that in Central. the Courts of Appeals upheld a regulation that we had held invalid. Here, the final regulation, which Judge Parker would uphold, dissenting op. p. 159 — a question properly left open by the majority opinion — was published just before Estate of Robertson was reversed. Thus, the reversals in Estate of Robertson and Estate of Spencer were in the face of Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-844 (1984). The Court of Appeals for the Sixth Circuit in Estate of Spencer v. Commissioner, 43 F.3d at 234, tried to defuse the Chevron argument by citing INS v. Cardoza-Fonseca, 480 U.S. 421 (1987), for the proposition that the Commissioner’s position is entitled to less deference because she has changed her position.2 See Priv. Ltr. Rui. 86-31-005 (Apr. 23, 1986). The courts have been inconsistent on this point. See, e.g., Bell Fed. Sav. & Loan Association v. Commissioner, 40 F.3d 224, 229 (7th Cir. 1994) (citing National Muffler Dealers Association v. United States, 440 U.S. 472 (1979)), for an expression of the contrary view.3  Where I come out on all this is that the policy underlying the qtip rules supports petitioner’s position in the case at hand, there are reasonable interpretations of section 2056(b)(7)(B)(i) and (ii) that support petitioner’s position, and the qtip rules deserve a liberal interpretation that will uphold that position. We properly leave to another day whether to uphold the Commissioner’s regulation to the contrary, section 20.2056(b)-7(d)(3), Estate Tax Regs. When we face that question, we should find it a much closer question under Chevron than the Court of Appeals for the Fifth Circuit’s opinion in Clayton might lead one to believe.4    See Covey, Estate, Gift and Income Taxation — 1993 Developments. U. Miami 28th Inst, on Est. Plan. par. 117.1 (1994); id. — 1994 Developments par. 116.1 (1995). Covey has warned will drafters of the danger of relying on the Court of Appeals for the Fifth Circuit’s approach in Estate of Clayton v. Commissioner, 976 F.2d 1486 (5th Cir. 1992). revg. 97 T.C. 327 (1991). The warning still seems to be sound, particularly in view of the position taken in sec. 20.2056(b)-7(d)(3), Estate Tax Regs.    The use of private letter rulings in this fashion erodes the statutory prohibition of sec. 6110(j)(3) on the use or citation of private rulings as precedent. I’m concerned that such use will have a stultifying effect on the private rulings process.    The infrequency with which the Supreme Court has cited INS v. Cardoza-Fonseca, 480 U.S. 421 (1987), in recent years, especially for the changed-position doctrine, where the Court seems more likely to disregard it, see Stutson v. United States, 516 U.S. __, 116 S. Ct. 600 (1996); Lawrence v. Chater, 516 U.S. _, 116 S. Ct. 604 (1996); cf. Thomas Jefferson Univ. v. Shalala, 512 U.S. _, _, 114 S. Ct. 2381, 2388 (1994); Good Samaritan Hosp. v. Shalala, 508 U.S. 402, _ (1993), 113 S. Ct. 2151, 2161 (1993), would seem to indicate that Cardoza-Fonseca is moribund, except, perhaps, in the immigration area that gave birth to it, see Franklin v. INS, 72 F.3d 571 (8th Cir. 1995); Zhang v. Slattery, 55 F.3d 732 (2d Cir. 1995).    The Courts of Appeals — for the Fifth Circuit in Estate of Clayton v. Commissioner, supra (before the release of the final regulation) and for the Eighth Circuit in Estate of Robertson v. Commissioner, 15 F.3d 779 (8th Cir. 1994), revg. 98 T.C. 678 (1992) (after its release) — found the Commissioner’s position to be in violation of the plain language of the statute. Acceptance of this view would derail the inquiry in Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc,, 467 U.S. 837 (1984), from getting to the second step that requires deference to the Commissioner’s view. It’s at this point that I part company from the position stated so categorically by the Court of Appeals for the Fifth Circuit. The contrariety of judicial views on this subject shows that reasonable people can disagree over what the appropriate result should be and whether it turns on the interpretation to be given to one or the other prong of sec. 2056(b)(7)(i) and (ii) or on the policy argument.