The David and Barbara Green 1993 Dynasty Trust, Mart D. Green, Trustee

United States Tax Court

REVIEWED

165 T.C. No. 7

THE DAVID AND BARBARA GREEN 1993 DYNASTY TRUST,

MART D. GREEN, TRUSTEE, ET AL., 1

Petitioners

v.

COMMISSIONER OF INTERNAL REVENUE,

Respondent

—————

Docket Nos. 19631-19, 19632-19, Filed October 2, 2025.

19633-19, 19634-19,

19635-19.

—————

Ps are electing small business trusts and individuals

who own shares of S, an S corporation. S’s 2011 and 2012

federal income tax returns claimed charitable contribution

deductions for donations of numerous artifacts. Each

return included Form 8283, Noncash Charitable

Contributions, which had been prepared by S. Each

Form 8283 included a description of the group of

contributed artifacts and reported an aggregate basis and

fair market value and a range of acquisition dates for the

group. Each return also included portions of an appraisal

report describing and valuing each artifact. S used the

services of an accounting firm to review each return before

filing.

Each P deducted, on its 2011 and 2012 federal

income tax returns, its pro rata share of the fair market

1 The following cases are consolidated herewith: Green Stewardship Trust

f.k.a. Green Management Trust and Green Family Management Trust, David M.

Green, Barbara A. Green, Steven T. Green, Mart D. Green, and Darsee Lett, Co-

Trustees, Docket No. 19632-19; Green Family Delta Trust, Steven T. Green and Mart

D. Green, Co-Trustees, Docket No. 19633-19; Mart D. Green and Diana K. Green,

Docket No. 19634-19; and Steven T. Green and Jackie D. Green, Docket No. 19635-19.

Served 10/02/25

2

value of the artifacts reported on S’s information return for

the same year. R disallowed all the deductions in Notices

of Deficiency issued to each P and determined against each

P a gross valuation misstatement penalty under I.R.C.

§ 6662(a) and (h) or, in the alternative, a substantial

valuation misstatement penalty under I.R.C. § 6662(a) and

(b)(3).

The parties filed Cross-Motions for Partial

Summary Judgment pertaining to (1) certain

substantiation issues under I.R.C. § 170 and (2) the rules

governing charitable contribution deductions for trusts

under I.R.C. §§ 641, 642, 681, 512, and 170.

Held: Genuine issues of material fact exist as to the

potential application of the reasonable cause defense under

I.R.C. § 170(f)(11)(A)(ii)(II), and summary adjudication on

the substantiation issues is not warranted.

Held, further, neither side has demonstrated it is

entitled to the rulings it seeks with respect to the rules

governing charitable contribution deductions for trusts.

Held, further, both R’s Motions and Ps’ Motions will

be denied.

TORO, J., wrote the opinion of the Court, which

URDA, C.J., and KERRIGAN, BUCH, PUGH, ASHFORD,

COPELAND, JONES, GREAVES, WEILER, LANDY,

ARBEIT, and FUNG, JJ., joined.

MARSHALL, J., wrote a dissenting opinion, which

GUIDER and JENKINS, JJ., joined.

JENKINS, J., wrote a dissenting opinion, which

NEGA, WAY, and GUIDER, JJ., joined in full, and which

MARSHALL, J., joined as to Parts I and III.

—————

3

Kurt M. Rupert, Michael A. Furlong, Judith Leslie LaReau, Charles E.

Geister III, and Len Burford Cason, for petitioners.

Vassiliki Economides Farrior, Kristen I. Nygren, William F. Castor,

Daniel J. Lavassar, Henry C. Bonney, and Naseem Jehan Khan, for

respondent in docket No. 19631-19.

Vassiliki Economides Farrior, Kristen I. Nygren, William F. Castor,

Daniel J. Lavassar, and Henry C. Bonney, for respondent in docket

Nos. 19632-19, 19633-19, 19634-19, and 19635-19.

OPINION

TORO, Judge: Now before the Court in these deficiency cases are

two sets of Cross-Motions for Partial Summary Judgment. As we

explain below, we will deny each Motion.

Background

We derive the following background from the Stipulations of

Facts with accompanying Exhibits, which are incorporated by reference,

and the Motion papers. The background is set forth solely to rule on the

Motions and not as findings of fact for these cases. See Sundstrand

Corp. v. Commissioner, 98 T.C. 518, 520 (1992), aff’d, 17 F.3d 965 (7th

Cir. 1994). The parties have stipulated that the U.S. Court of Appeals

for the Tenth Circuit is the appellate venue for these cases. See I.R.C.

§ 7482(b)(2). 2

I. Ownership of Hobby Lobby Stores, Inc.

These cases involve three electing small business trusts 3—the

David and Barbara Green 1993 Dynasty Trust, the Green Stewardship

Trust, and the Green Family Delta Trust (together, Trusts)—and two

married couples—Mart D. and Diana K. Green as well as Steven T. and

2 Unless otherwise indicated, statutory references are to the Internal Revenue

Code, Title 26 U.S.C. (I.R.C. or Code), in effect at all relevant times, regulation

references are to the Code of Federal Regulations, Title 26 (Treas. Reg.), in effect at all

relevant times, and Rule references are to the Tax Court Rules of Practice and

Procedure. Monetary amounts are rounded to the nearest dollar.

3 In tax parlance, electing small business trusts are commonly referred to as

“ESBTs,” and we follow that convention for convenience.

4

Jackie D. Green—who own shares of Hobby Lobby Stores, Inc. (Hobby

Lobby). Hobby Lobby, an arts and crafts retailer, is an S corporation

within the meaning of section 1361. 4

The Trusts and the Greens owned more than 99% of Hobby Lobby

during the 2011 and 2012 tax years (years at issue). The following chart

shows their respective shares of ownership.

Shareholder Percentage Ownership

The David and Barbara Green 1993 Dynasty Trust 88.2267%

The Green Stewardship Trust 0.1392%

The Green Family Delta Trust 8.1839%

Mart D. and Diana K. Green (through the Mart D. 1.0323%

Green Succession Trust)

Steven T. and Jackie D. Green (through the Steven T. 2.0654%

Green Succession Trust)

Nonparty 0.3525%

Total 100%

II. The Donations and Relevant Tax Returns

In the years at issue, Hobby Lobby donated to the Museum of the

Bible, Inc. (Museum), a section 501(c)(3) organization, more than 1,200

Hebrew biblical scrolls, biblical manuscripts in Hebrew, Greek, Latin,

and Aramaic, and printed books and Bibles dating between 1455 and

4 Subchapter S of chapter 1 of the Code governs the tax treatment of

S corporations. Although subchapter S generally restricts an S corporation’s

shareholders to individuals, it allows certain types of trusts to hold S corporation

shares, including ESBTs and trusts treated under subchapter J, part I, subpart E, as

wholly owned by individuals who are citizens or residents of the United States. See

I.R.C. § 1361(b)(1)(B), (c)(2)(A)(i), (v).

5

1782. 5 For convenience, we will refer to the property donated to the

Museum as the Contributed Artifacts.

On its income tax returns for those years, Hobby Lobby claimed

noncash charitable contribution deductions of $23,038,000 and

$61,633,000 with respect to the Contributed Artifacts. 6 Consistent with

the rules governing S corporations and their shareholders, the Trusts

and the Greens reported their ratable shares of the deductions on their

federal income tax returns. 7

A. Hobby Lobby’s Form 8283 for Taxable Year 2011

Hobby Lobby attached Form 8283, Noncash Charitable

Contributions (Rev. December 2006), to its 2011 Form 1120–S. Hobby

Lobby used the services of accounting firm Grant Thornton LLP to

review its work papers and Form 1120–S, including the Form 8283,

before the return’s filing.

Hobby Lobby reported on the Form 8283 that it contributed to the

Museum “431 Manuscript Hebrew Biblical Scrolls: Medieval,

Renaissance, Enlightenment, & modern: 15th Century to 20th Century.

Europe, Africa, and Middle East.” Doc. 23, Ex. 99-J. On the same form,

Hobby Lobby reported that it purchased the Contributed Artifacts

between December 2009 and September 2010, that they had an

aggregate basis of $1,753,432 and an aggregate appraised fair market

value of $23,038,000 at the time of the contribution, and that they were

contributed on December 30, 2011.

Hobby Lobby also attached to the 2011 Form 1120–S, sections of

an appraisal report by Lee Raffaele Biondi of Biondi Rare Books and

5 Gifts by an S corporation to a section 501(c)(3) organization may be charitable

contributions within the meaning of section 170(c) that are deductible to the

shareholders of the S corporation under section 170(a) or section 642(c)(1).

6 An S corporation reports items, including deductions, to its shareholders and

the Internal Revenue Service (IRS) on an information return, Form 1120–S, U.S.

Income Tax Return for an S Corporation. See I.R.C. § 6037(a) and (b); Treas. Reg.

§ 1.1366-1(a)(1). The shareholders take these items into account on their own returns.

See I.R.C. § 1366(a).

7 The Trusts claimed their own shares of the deductions, and the Greens

claimed successor trusts’ shares of the deductions. Each deducted the product of its

Hobby Lobby ownership percentage and Hobby Lobby’s total claimed charitable

contribution deduction. The total claimed deduction was based on the appraised fair

market value of the Contributed Artifacts that Hobby Lobby reported.

6

Manuscripts, which described and valued each scroll as of December 30,

2011. 8 The appraisal report indicated that the value per item ranged

from $1,000 to $295,000. It did not identify, however, the acquisition

date or basis for the individual scrolls. Mr. Biondi signed the Form 8283

declaration of appraiser on or about July 31, 2012.

B. Hobby Lobby’s Form 8283 for Taxable Year 2012

Hobby Lobby attached Form 8283 (Rev. December 2012) to its

2012 Form 1120–S. As it did for 2011, Hobby Lobby used the services of

Grant Thornton to review its work papers and Form 1120–S, including

the Form 8283, before the return’s filing.

Hobby Lobby reported on the Form 8283 that it contributed

“[o]ver 800 Ancient & Medieval Biblical Manuscripts in Hebrew, Greek,

Latin, and Aramaic, and printed books and Bibles (1455-1782).” Doc. 23,

Ex. 101-J. Hobby Lobby also reported that it purchased the Contributed

Artifacts from December 2008 to August 2011, that they had an

aggregate basis of $18,749,758 and an aggregate appraised fair market

value of $61,633,000 at the time of the contribution, and that they were

contributed on December 31, 2012.

As it had for 2011, Hobby Lobby attached sections of an appraisal

report from Mr. Biondi to the information return that described and

valued each artifact as of December 31, 2012. 9 The appraisal report set

forth a wide value range for the items donated in 2012, with several

items identified as having zero value while multiple others were valued

in the millions of dollars, up to a high of $9,500,000.

In connection with the 2012 appraisal report, Mr. Biondi prepared

a Uniform Standards of Professional Appraisal Practice certification, in

which he explained that he had inspected some of the Contributed

Artifacts “in the company of Michael Thompson and Carol Sandberg” of

Michael R. Thompson Rare Books, Doc. 19, Ex. 44-J, at 33, and that

Mr. Thompson and Ms. Sandberg had provided “personal property

valuation assistance,” id. at 35. Mr. Biondi further explained in the

certification that “the Appraisal Report is solely mine—this is not a joint

8 Specifically, Hobby Lobby excluded sections 4, 5, and 6 of the appraisal report.

Those sections included background information on Sefer Torah scrolls, regional

histories of Jewish cultural centers, and the Hebrew Alphabet, respectively.

9 Hobby Lobby omitted the same sections from the 2012 appraisal report as it

had from the 2011 appraisal report.

7

appraisal—and all information and valuation opinions herein are

strictly my responsibility.” Id. at 35. The valuations of several

Contributed Artifacts in the report are accompanied, however, by a

statement signed by Mr. Thompson and Ms. Sandberg that they

“conclude and express [the] Fair Market Value” of the relevant artifact

or that they “concur with Mr. Biondi’s Fair Market Value opinion.” The

appraisal report describes the credentials of Mr. Biondi, Mr. Thompson,

and Ms. Sandberg. Mr. Biondi signed the Form 8283 declaration of

appraiser on or about August 15, 2013, but the return did not include a

declaration of appraiser from Mr. Thompson or Ms. Sandberg.

C. Grant Thornton Review of Hobby Lobby Returns

In a Declaration submitted in connection with the Motions,

Jeffrey Williams, Hobby Lobby’s assistant vice president–tax, explains

the following concerning the company’s tax return preparation

practices:

7. During 2011 and 2012, HLSI used the

services of Grant Thornton, LLP to review [Hobby Lobby’s]

work papers and federal tax returns prior to filing, and to

file [Hobby Lobby’s] federal tax returns.

8. If Grant Thornton had any questions,

comments, or concerns regarding either the work papers or

the federal returns, these were discussed with [Hobby

Lobby], typically by telephone.

9. Once Grant Thornton finalized their review of

the federal tax returns and work papers, [Hobby Lobby]

would finalize preparation of all state tax returns, and the

state tax returns and any additional work papers prepared

were likewise delivered to Grant Thornton for review.

10. [Hobby Lobby] relied on Grant Thornton to

raise any compliance issues regarding [Hobby Lobby’s]

2011 and 2012 federal tax returns, including the

Form 8283 appraisal summaries prior to filing.

11. No such issues were raised by Grant Thornton

with respect to the 2011 and 2012 Form 8283 appraisal

summaries.

Doc. 54, Ex. 1 (Declaration of Jeffrey Williams).

8

III. IRS Examination and Petitions to This Court

The Commissioner examined Hobby Lobby’s returns for the years

at issue and made adjustments. Eventually, the Commissioner issued

Notices of Deficiency to the Trusts and the Greens in connection with

those adjustments. The Notices of Deficiency determined that no

deductions should be allowed with respect to the Contributed Artifacts

because “[i]t has not been established that all the requirements of

section 170 . . . have been satisfied.” 10 The Notices also determined gross

valuation misstatement penalties under section 6662(a), (b)(3), and (h)

or, in the alternative, substantial valuation misstatement penalties

under section 6662(a), (b)(3), and (e).

Petitions seeking redetermination of the deficiencies and

penalties were timely filed in our Court. The cases were consolidated,

and the Motions now before us followed in due course. 11

IV. The Parties’ Motions

A. Cross-Motions on Substantiation Issues

The Commissioner’s first Motion asks us to hold that no

deductions are allowed for the contributions Hobby Lobby made to the

Museum because the Forms 8283 included in Hobby Lobby’s returns

contain several defects and “violate [the Deficit Reduction Act of 1984

(DEFRA), Pub. L. No. 98-369,] § 155(a)(1)(C)[, 98 Stat. 494, 691,] and

the requirements prescribed by the Secretary [of the Treasury] in

[certain] Treasury Regulations.” Resp’t’s Mot. for Partial Summ. J. 1

(Doc. 42).

More specifically, the Commissioner takes the position that

DEFRA § 155(a)(3), 98 Stat. at 691, and Treasury Regulation § 1.170A-

13(c)(4)(ii) required Hobby Lobby to include the individual basis and

date of acquisition of each of the Contributed Artifacts on its Forms 8283

for the years at issue. Because Hobby Lobby included only aggregate

10 In the alternative, the Commissioner determined that the Trusts and the

Greens were entitled to reduced deductions, totaling $2,401,334 for 2011 and

$18,683,572 for 2012, based on his view of the Contributed Artifacts’ fair market

values. The alternative values represent roughly 10% and 30% of the claimed

deductions, respectively.

11 In a separate opinion filed concurrently herewith, Green 1993 Dynasty Trust

v. Commissioner, T.C. Memo. 2025-100, the Court addresses two other Motions

relating to the penalties at issue.

9

information, the Commissioner contends, its Forms 8283 were

insufficient to substantiate its claimed deductions.

Moreover, with respect to the Form 8283 for 2012, the

Commissioner maintains that two appraisers in addition to Mr. Biondi

(Mr. Thompson and Ms. Sandberg) contributed to the appraisal report,

but did not sign the Form 8283 as required by Treasury Regulation

§ 1.170A-13(c)(5)(iii). The Commissioner also observes that, if the

Motion is granted, trial will still be necessary on valuation issues related

to the determined penalties.

The Trusts’ and the Greens’ responses to the Commissioner’s

arguments fall into four main categories. The first is that they strictly

complied with the applicable substantiation rules. The second is that

they substantially complied with those rules, relying in part on Bond v.

Commissioner, 100 T.C. 32, 41–42 (1993) (holding that certain of the

regulatory reporting requirements of Treasury Regulation § 1.170A-

13(c) can be satisfied, in appropriate circumstances, by substantial,

rather than literal, compliance). The third is that even if they did not

comply with the rules, their noncompliance was attributable to

reasonable cause on account of their reliance on the services of Grant

Thornton and is thus protected by section 170(f)(11)(A)(ii)(II). And the

fourth is that the substantiation rules at issue did not apply to them,

either because as S corporation shareholders their only obligation was

to attach Hobby Lobby’s Forms 8283 to their returns, or because, with

respect to the Trusts only, neither DEFRA nor the related regulations

apply to them.

The Trusts and the Greens appear to maintain that their

arguments under the first, second, and fourth categories justify partial

summary judgment in their favor on the substantiation issues. Their

reasonable cause argument appears only to be defensive—that is, it may

serve to defeat the Commissioner’s Motion but would not justify partial

summary judgment for the Trusts and the Greens.

The Commissioner disagrees with the Trusts and the Greens on

all counts.

B. Cross-Motions with Respect to the Trusts

The Commissioner’s second Motion offers an alternative rationale

for fully disallowing the charitable contribution deductions the Trusts

claimed. Specifically, the Commissioner seeks a ruling that the Trusts’

shares of the noncash charitable contributions from Hobby Lobby that

10

would otherwise be allowable under section 642(c) are fully disallowed

by section 681 because they are entirely allocable to the Trusts’

unrelated business income.

Alternatively, the Commissioner claims that, under the Tenth

Circuit decision in Green v. United States, 880 F.3d 519 (10th Cir. 2018),

the Trusts’ deductions are limited to their shares of Hobby Lobby’s

adjusted bases in the Contributed Artifacts, rather than the fair market

values.

With respect to the Commissioner’s effort entirely to disallow

their deductions, the Trusts retort that the Motion ignores applicable

Treasury regulations and that those regulations clearly permit partial

deductions for charitable contributions allocable to the Trusts’ unrelated

business income. They point specifically to Treasury Regulation

§ 1.681(a)-2(a) as support for their view.

As to the Commissioner’s alternative argument, the Trusts

maintain that the Tenth Circuit’s decision is distinguishable because

the deductions here are governed by section 641(c), which provides

special rules for the taxation of ESBTs, rather than section 642(c).

Based on the interplay among sections 641, 681, 512(b)(11), and 170, in

their view, the deductions should be allowed at fair market values, but

within the limits prescribed by section 170(b)(1)(A).

Discussion

I. Partial Summary Judgment

The purpose of summary judgment is to expedite litigation and

avoid costly and unnecessary trials. FPL Grp., Inc. & Subs. v.

Commissioner, 116 T.C. 73, 74 (2001). The Court may grant partial

summary judgment when there is no genuine dispute as to any material

fact and the movant is entitled to judgment as a matter of law.

Rule 121(a)(1) and (2); Elec. Arts, Inc. v. Commissioner, 118 T.C. 226,

238 (2002); see also Take v. Commissioner, 82 T.C. 630, 633 (1984)

(explaining that if both parties move for summary judgment or partial

summary judgment, this rule applies to each motion), aff’d, 804 F.2d 553

(9th Cir. 1986). In considering the Motions, we construe factual

materials and inferences drawn from them in the light most favorable

to each nonmoving party. See Sundstrand Corp., 98 T.C. at 520.

The party moving for summary judgment bears the burden of

showing an absence of any dispute of material fact. Celotex Corp. v.

11

Catrett, 477 U.S. 317, 322 (1986). If the burden of persuasion at trial

would be on the nonmoving party, the movant may carry this burden by

demonstrating to the Court that the nonmoving party’s evidence is

insufficient to establish an essential element of the nonmoving party’s

claim. Id.; Tesone v. Empire Mktg. Strategies, 942 F.3d 979, 994 (10th

Cir. 2019). If the movant makes this showing, the burden shifts to the

nonmovant to set forth specific facts showing there is a genuine dispute

for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986);

Tesone, 942 F.3d at 994. The nonmoving party may not rest upon mere

allegations or denials in its pleadings, but must set forth specific facts

showing there is a dispute. Rule 121(d); Sundstrand Corp., 98 T.C.

at 520.

II. Charitable Contribution Deductions

A. Overview of Governing Legal Framework

Section 170(a)(1) allows as a deduction any charitable

contribution made within the taxable year. If the taxpayer makes a

charitable contribution of property other than money, the amount of the

contribution is generally equal to the fair market value of the property

when contributed. Treas. Reg. § 1.170A-1(c)(1). “A charitable

contribution shall be allowable as a deduction only if verified under

regulations prescribed by the Secretary.” I.R.C. § 170(a)(1).

Congress has been particularly interested in certain of the

verification requirements for charitable contributions. For example, in

1984, in an off-Code provision in DEFRA § 155(a)(1) and (2), 98 Stat.

at 691, Congress directed the Secretary to issue regulations under

section 170(a)(1) “which require any individual, closely held corporation,

or personal service corporation claiming a deduction under section 170”

greater than $5,000 to “obtain a qualified appraisal for the property

contributed,” “attach an appraisal summary to the return on which such

deduction is first claimed for such contribution,” and “include on such

return such additional information (including the cost basis and

acquisition date of the contributed property) as the Secretary may

prescribe in such regulations.” DEFRA also directed that the

regulations “require the taxpayer to retain any qualified appraisal,”

DEFRA § 155(a)(1) (flush language), but did not direct that the

appraisals be attached to the relevant returns. In response to DEFRA’s

directive, the Secretary added paragraph (c) to Treasury Regulation

§ 1.170A-13.

12

Twenty years after DEFRA, Congress decided to codify and

expand the concepts reflected in DEFRA and the regulations thereunder

by adding paragraph (11) to section 170(f). See, e.g., Murphy v.

Commissioner, T.C. Memo. 2023-72, at *28 n.13 (citing American Jobs

Creation Act of 2004 (AJCA), Pub. L. No. 108-357, § 883(a), 118 Stat.

1418, 1631); Pankratz v. Commissioner, T.C. Memo. 2021-26, at *20

(same); Belair Woods, LLC v. Commissioner, T.C. Memo. 2018-159,

at *22 (same).

Section 170(f)(11)(A)(i) provides:

In the case of an individual, partnership, or corporation, no

deduction shall be allowed under subsection (a) for any

contribution of property for which a deduction of more than

$500 is claimed unless such person meets the requirements

of subparagraphs (B), (C), and (D), as the case may be, with

respect to such contribution.

Subparagraphs (B), (C), and (D) set out increasingly stringent

substantiation rules based on the amount of the donation involved.

Subparagraph (B) governs “contributions of property for which a

deduction of more than $500 is claimed.” Its requirements are met “if

the individual, partnership or corporation includes with the return for

the taxable year in which the contribution is made a description of such

property and such other information as the Secretary may require.” 12

I.R.C. § 170(f)(11)(B).

Subparagraph (C) governs “contributions of property for which a

deduction of more than $5,000 is claimed.” Its requirements are met “if

the individual, partnership, or corporation obtains a qualified appraisal

of such property and attaches to the return for the taxable year in which

such contribution is made such information regarding such property and

such appraisal as the Secretary may require.” I.R.C. § 170(f)(11)(C).

Subparagraph (D) governs “contributions of property for which a

deduction of more than $500,000 is claimed.” Its requirements are met

“if the individual, partnership, or corporation attaches to the return for

the taxable year a qualified appraisal of such property.” I.R.C.

§ 170(f)(11)(D). Put another way, while DEFRA directed the Secretary

to require taxpayers to obtain and keep qualified appraisals for

12 The requirements of section 170(f)(11)(B) do not apply “to a C corporation

which is not a personal service corporation or a closely held C corporation.”

13

contributions of more than $5,000, section 170(f)(11)(D) now requires

that for contributions of more than $500,000 the qualified appraisal

itself, not just a summary, must be attached to the return.

Two further subparagraphs of section 170(f)(11) merit a brief

mention here. Subparagraph (F) provides that “[f]or purposes of

determining thresholds under this paragraph [i.e., section 170(f)(11)],

property and all similar items of property donated to 1 or more donees

shall be treated as 1 property.” I.R.C. § 170(f)(11)(F). Subparagraph (G)

provides that, “[i]n the case of a partnership or S corporation, this

paragraph shall be applied at the entity level, except that the deduction

shall be denied at the partner or shareholder level.” I.R.C.

§ 170(f)(11)(G).

B. New Statutory Reasonable Cause Defense

The statutory changes brought about by the AJCA were not all

bad news for taxpayers. While expanding the substantiation

requirements, Congress also provided “an escape hatch.” Pankratz, T.C.

Memo. 2021-26, at *21. Section 170(f)(11)(A)(ii)(II) expressly provides

that section 170(f)(11)(A)(i)—the rule denying the deduction on

substantiation grounds—“shall not apply if it is shown that the failure

to meet such requirements is due to reasonable cause and not to willful

neglect.”

We have previously described section 170(f)(11)(A)(ii)(II) as “a

new statutory ‘reasonable cause’ defense for failure to comply with the

regulatory reporting requirements.” Belair Woods, T.C. Memo. 2018-

159, at *22. “This statutory ‘reasonable cause’ defense is broader than

the regulatory ‘reasonable cause’ defense” that the Secretary had

promulgated in response to DEFRA. Id.

The regulatory “defense is limited to situations where the

taxpayer has reasonable cause ‘for being unable to provide the

information required.’” Id. (quoting Treas. Reg. § 1.170A-

13(c)(4)(iv)(C)(1)).

By contrast, the “formulation of the section 170(f)(11)(A)(ii)(II)

defense—referring to the existence of ‘reasonable cause’ and the absence

of ‘willful neglect’—resembles that appearing in numerous Code

provisions that impose penalties or additions to tax.” Id. (citing I.R.C.

§§ 6039G(c)(2), 6704(c)(1), 6652(f)–(j), 6709(c)). And we generally

interpret Code provisions that use the same words to have the same

meaning. See id. (citing Elec. Arts, Inc., 118 T.C. at 241). “Thus,

14

although the section 170(f)(11)(A)(ii)(II) ‘reasonable cause’ defense

relieves the taxpayer from disallowance of a deduction rather than from

imposition of a penalty, we have construed these defenses similarly.” Id.

at *23 (first citing Alli v. Commissioner, T.C. Memo. 2014-15, at *60; and

then citing Crimi v. Commissioner, T.C. Memo. 2013-51, at *98–99).

“Reasonable cause requires that the taxpayer have exercised

ordinary business care and prudence as to the challenged item. . . . Thus,

the inquiry is inherently a fact-intensive one, and facts and

circumstances must be judged on a case-by-case basis.” Crimi, T.C.

Memo. 2013-51, at *99 (first citing United States v. Boyle, 469 U.S. 241

(1985); and then citing Rothman v. Commissioner, T.C. Memo. 2012-163,

103 T.C.M. (CCH) 1846, 1874 (2012)); accord Treas. Reg. § 1.6664-4(b)(1)

(“The determination of whether a taxpayer acted with reasonable cause

and in good faith is made on a case-by-case basis, taking into account all

pertinent facts and circumstances.”); see also Grecian Magnesite Mining,

Indus. & Shipping Co. v. Commissioner, 149 T.C. 63, 94 (2017) (same),

aff’d, 926 F.3d 819 (D.C. Cir. 2019).

A taxpayer’s reliance on the advice of a professional, such as a

certified public accountant, constitutes a valid defense if the taxpayer

proves by a preponderance of the evidence that (1) the taxpayer

reasonably believed the professional was a competent tax adviser with

sufficient expertise to justify reliance; (2) the taxpayer provided

necessary and accurate information to the adviser; and (3) the taxpayer

actually relied in good faith on the professional’s advice. See, e.g.,

Neonatology Assocs., P.A. v. Commissioner, 115 T.C. 43, 98–99 (2000),

aff’d, 299 F.3d 221 (3d Cir. 2002); Crimi, T.C. Memo. 2013-51, at *99;

Alli, T.C. Memo. 2014-15, at *61.

III. Resolution of the Motions

A. Cross-Motions on Substantiation Issues

On the substantiation issues, we begin (and end) our analysis

with the Trusts’ and the Greens’ invocation of the reasonable cause

defense under section 170(f)(11)(A)(ii)(II).

As we have consistently explained, the defense provides an

“escape hatch,” Pankratz, T.C. Memo. 2021-26, at *21, from an otherwise

“demanding regime,” Murphy, T.C. Memo. 2023-72, at *25, for

substantiating noncash charitable contributions, see, e.g., id. at *37

(“[The taxpayers’] omission of their cost bases in the donated properties

on Forms 8283 [would] be excused for reasonable cause, so that we will

15

not disallow their charitable contribution deductions for failure to

comply with the reporting requirements of section 170(f)(11) and

Treasury Regulation § 1.170A-13(c).”); Presley v. Commissioner, T.C.

Memo. 2018-171, at *64–70 (analyzing the requirements for reasonable

cause and declining to find reasonable cause because the taxpayer did

not follow the advice given), aff’d, 790 F. App’x 914 (10th Cir. 2019);

Chrem v. Commissioner, T.C. Memo. 2018-164, at *16–25 (analyzing

whether the defense applies and denying partial summary judgment);

Belair Woods, T.C. Memo. 2018-159, at *22–24 (denying in part partial

summary judgment based on the possible application of reasonable

cause); Crimi, T.C. Memo. 2013-51, at *102 (“[The taxpayers were]

entitled to a deduction for the charitable contribution of the subject

property even if [they] did not attach a qualified appraisal required

under the Code and the regulations, because any failure to comply with

the requirement is excused on the ground of reasonable cause.”).

Application of the defense “relieves the taxpayer from

disallowance of [the claimed charitable contribution] deduction.” Belair

Woods, T.C. Memo. 2018-159, at *23. Put another way, if the defense

applies, the Trusts and the Greens would no longer have to worry about

the substantiation requirements set out in subparagraphs (B), (C), and

(D) of section 170(f)(11). Moreover, if the defense is available, the Court

would not need to resolve whether the Forms 8283 for the years at issue

complied with the relevant statutory and regulatory requirements,

either strictly or substantially, or whether they were required to,

mooting many of the thorny (and in part novel) legal issues reflected in

the parties’ Motion papers.

Whether the defense is available here is a factual question that

requires a trial. As we have recognized, the reasonable cause inquiry

under section 170(f)(11) “is inherently a fact-intensive one, and facts and

circumstances must be judged on a case-by-case basis.” See Crimi, T.C.

Memo. 2013-51, at *99; see also, e.g., Boyle, 469 U.S. at 249 n.8

(“Whether the elements that constitute ‘reasonable cause’ are present in

a given situation is a question of fact . . . .”). An evaluation of whether

the taxpayers “exercised ordinary business care and prudence as to the

challenged item,” Crimi, T.C. Memo. 2013-51, at *99, requires an

understanding of the facts concerning the item. That evaluation cannot

be made on the record now before us.

Moreover, where (as here) taxpayers claim to have relied on a

professional, such as a certified public accountant, we must evaluate

(among others) the expertise of the adviser, the information provided to

16

the adviser, the taxpayers’ views concerning the adviser’s competence,

and the taxpayers’ reliance on the adviser’s advice. See, e.g.,

Neonatology Assocs., 115 T.C. at 98–99. All of these are matters for trial.

See, e.g., Belair Woods, T.C. Memo. 2018-159, at *24 (noting that

reliance-on-professional defense is inherently fact-intensive and

outlining questions for trial); Chrem, T.C. Memo. 2018-164, at *24–25

(same).

The Commissioner offers two principal arguments in opposition;

neither carries the day. First, the Commissioner contends that “DEFRA

does not contain a reasonable cause defense” and that, because the

alleged defects in the Forms 8283 “are all elements required by Congress

in DEFRA,” reasonable cause gives the Trusts and the Greens no help.

Resp’t’s Mem. in Supp. of Obj. to Mot. for Partial Summ. J. 34–35

(Doc. 62). As the analysis above shows, the Commissioner’s view of the

law on this point does not accord with either the Code or our precedent.

Second, according to the Commissioner, the evidence produced by

the Trusts and the Greens does not support finding reasonable cause as

a matter of law because (he claims) (a) Hobby Lobby did not rely on the

advice of a professional and (b) Hobby Lobby did not provide necessary

and accurate information to the tax professional. How the

Commissioner can claim to know these facts at this stage of the

proceedings is unclear. What is clear is that the Trusts and the Greens

vigorously challenge the Commissioner’s assertions. And they have

submitted a Declaration from a Hobby Lobby executive to back their

position up. See Background Part II.C above. Read in the light most

favorable to them as nonmovants, see Sundstrand Corp., 98 T.C. at 520;

see also Anderson, 477 U.S. at 255, the Declaration plainly raises

genuine issues of material fact, 13 see also Rule 121(e) (providing that a

party may resist summary judgment by pointing out evidence that the

13 For example, what Hobby Lobby told its Grant Thornton advisers; what

those advisers did in response to Hobby Lobby’s instructions; what materials those

advisers reviewed; what views, if any, the Grant Thornton advisers held about the

relevant statutory and regulatory provisions, the Forms 8283 in effect at the relevant

times, and the instructions accompanying those forms; and what views the Grant

Thornton advisers had about the sufficiency of the Forms 8283 that Hobby Lobby had

prepared—especially as related to the basis of the Contributed Artifacts, the

acquisition dates of the Contributed Artifacts, and the signature issues—are all

questions whose answers would inform the decision whether a reasonable cause

defense is available here.

17

party plans to offer through testimony at trial, which may not be

available for consideration at the summary judgment stage).

In short, the possible availability of the reasonable cause defense

precludes partial summary judgment in favor of the Commissioner on

the substantiation issue. And, because trial will be required on this

issue (as well as the open valuation issues that the Commissioner’s own

Motions highlight), we decline to decide summarily the remaining

substantiation issues, which (depending on the outcome of trial) might

not need to be decided at all. See, e.g., Chrem, T.C. Memo. 2018-164,

at *25 (“Barring settlement, these cases will need to go to trial on the

assignment of income issue and on [the taxpayers’] entitlement to the

‘reasonable cause’ defense. Under these circumstances we deem it

prudent, for two reasons, to deny in their entirety both pending motions

for partial summary judgment. First, if [the taxpayers] prevail on the

‘reasonable cause’ defense, it will be unnecessary for us to decide

whether they substantially complied with the appraisal reporting

requirements. Second, there could be some factual overlap between the

two sets of issues.”).

B. Cross-Motions with Respect to the Trusts

As to the Motions related to the Trusts and the interplay among

sections 641, 642, 681, 512(b)(11), and 170, after a careful review of the

Motion papers, neither side has convinced us that it is clearly entitled

to the rulings that it seeks. We therefore believe it prudent to defer

resolving those issues until a full record for these cases is developed at

trial and the matters concerning the substantiation issues are also

resolved. See Kroh v. Commissioner, 98 T.C. 383, 390 (1992) (reviewed)

(“Since the effect of granting a motion for summary judgment is to decide

an issue against a party without allowing [it] an opportunity for trial,

such action is a ‘drastic remedy’ to be used cautiously and sparingly after

a consideration of the case reveals that the requirements for summary

judgment have clearly been met.” (quoting Espinoza v. Commissioner,

78 T.C. 412, 416 (1982))).

Conclusion

For the reasons set out above, the Cross-Motions for Partial

Summary Judgment will be denied.

18

To reflect the foregoing,

An appropriate order will be issued.

Reviewed by the Court.

URDA, C.J., and KERRIGAN, BUCH, PUGH, ASHFORD,

COPELAND, JONES, GREAVES, WEILER, LANDY, ARBEIT, and

FUNG, JJ., agree with this opinion of the Court.

NEGA, MARSHALL, WAY, GUIDER, and JENKINS, JJ.,

dissent.

19

MARSHALL, J., with whom GUIDER and JENKINS, JJ., join,

dissenting: Rule 121(a) provides that the “Court shall grant summary

judgment if the movant shows that there is no genuine dispute as to any

material fact and the movant is entitled to judgment as a matter of law.”

The Court “shall”—not may.

The parties chose to postpone a scheduled trial session in favor

of waiting for answers to their complicated questions of law. They filed

Cross-Motions for Partial Summary Judgment pertaining to Hobby

Lobby’s compliance with the section 170(f)(11) and Treasury Regulation

§ 1.170A-13(c) substantiation requirements, ESBT petitioners’

entitlement to deductions under sections 642(c) and 681(a), and the

determined penalties. The six Motions, along with attached

memoranda, replies, and other related filings, exceeded 1,000 pages.

The parties also filed four Stipulations of Facts exceeding 10,000 pages.

On the basis of these extensive filings, the Court can decide

multiple issues of law now. Doing so would shorten trial and offer the

parties insights with which they could better explore settlement.

Instead, the opinion of the Court provides no answers to the parties’

questions of law and, after reviewing the thousands of pages filed, the

Court disposes of only one substantive issue (i.e., penalty approval

under section 6751(b)) in a separate, nonprecedential opinion, Green

1993 Dynasty Trust v. Commissioner, T.C. Memo. 2025-100, filed this

date. As support for its decision to defer resolution of the substantive

issues, the opinion of the Court concludes that “granting a motion for

summary judgment is to decide an issue against a party without

allowing [it] an opportunity for trial, [and] such action is a ‘drastic

remedy’ to be used cautiously and sparingly.” See op. Ct. p. 17 (quoting

Kroh v. Commissioner, 98 T.C. 383, 390 (1992)). When both parties

contend that they are entitled to partial summary judgment because

there is no dispute as to any material fact, I understand that to mean

they are identifying questions of law—and I think it is a “drastic

remedy,” to the detriment of the parties, that the opinion of the Court

declines to answer those questions.

20

JENKINS, J., with whom NEGA, WAY, and GUIDER, JJ., join,

and with whom MARSHALL, J., joins as to Parts I and III, dissenting:

The opinion of the Court concludes that summary judgment is not

warranted because the existence of a triable issue with respect to the

possible availability of a reasonable cause defense renders it imprudent

to address the other issues presented by the parties in the Cross-Motions

for Partial Summary Judgment considered (Motions). Although I would

not grant any of the Motions in full, I respectfully disagree with the

opinion of the Court to defer resolution of the purely legal issues

presented and would grant some of the Motions in part as they relate to

those issues.

I. Purpose of Summary Judgment

As the opinion of the Court notes, see op. Ct. p. 10, the purpose of

summary judgment is to expedite litigation and avoid costly and

unnecessary trials, see FPL Grp., Inc. & Subs. v. Commissioner, 116 T.C.

73, 74 (2001). In line with this purpose, “[p]artial adjudications . . . can

be valuable devices for defining, narrowing, and focusing the issues to

be litigated, thus conserving judicial resources.” William W. Schwarzer,

et al., The Analysis and Decision of Summary Judgment Motions (Fed.

Jud. Ctr. 1991), reprinted in 139 F.R.D. 441, 496 (1992). Partial

summary adjudication is appropriate if some but not all issues in the

case may be decided as a matter of law, even though not all the issues

in the case are disposed of. See Rule 121(a)(1); Turner Broad. Sys., Inc.

& Subs. v. Commissioner, 111 T.C. 315, 323–24 (1998). Accordingly,

partial summary judgment is appropriate to narrow the scope of issues

for trial and to resolve issues that may make a case more susceptible to

settlement, potentially avoiding trial altogether and thus conserving

economic and judicial resources.

Nevertheless, the opinion of the Court holds that because a

finding of reasonable cause would negate the need to address some of

the issues raised in the parties’ Motions, the Court should reserve

judgment on all of the issues, even those that are preconditions to the

reasonable cause inquiry and those that are separate, purely legal issues

on which reasonable cause has no bearing. This approach is particularly

significant given that it leads the Court to sidestep all of the issues

relating to the three electing small business trusts—the David and

Barbara Green 1993 Dynasty Trust, the Green Stewardship Trust, and

the Green Family Delta Trust (together, Trusts)—specifically, even

though the Trusts collectively claimed more than 95% of the deductions

at issue in these cases, giving those issues outsized importance.

21

II. Motions Concerning Substantiation Issues

Section 170(f)(11)(A)(ii)(II) excuses failure to comply with section

170(f)(11)(B), (C), and (D) if it is shown that the failure to meet the

requisite substantiation requirements is due to reasonable cause and

not to willful neglect. Because the section 170(f)(11) reasonable cause

defense resembles the defense appearing in numerous other Code

sections, the Court has construed the section 170(f)(11) defense in the

same way the defense is construed in those other Code sections. See

Belair Woods, LLC v. Commissioner, T.C. Memo. 2018-159, at *22–23

(first citing Alli v. Commissioner, T.C. Memo. 2014-15, at *60; and then

citing Crimi v. Commissioner, T.C. Memo. 2013-51, at *98–99).

Notably, the opinion of the Court relies on Belair Woods, Alli, and

Crimi to explain how the Court construes the section 170(f)(11)

reasonable cause defense, see op. Ct. pp. 13–14, but ignores those cases

in considering the interaction of the defense with the determination of

strict or substantial compliance with the substantiation requirements.

In all three cases, the Court first addressed the substantiation

requirements by analyzing, even if not determining, whether the

taxpayer strictly or substantially complied with those requirements,

before turning to the reasonable cause defense. See Belair Woods, LLC,

T.C. Memo. 2018-159, at *11–24 (analyzing strict and substantial

compliance before holding “that Belair did not comply, either strictly or

substantially, with the regulatory reporting requirements” and then

turning to the reasonable cause defense); Alli, T.C. Memo. 2014-15,

at *51–63 (considering substantial compliance before holding that the

taxpayers “did not substantially comply with the qualified appraisal and

reporting regulations” and then turning to the reasonable cause

defense); cf. Crimi, T.C. Memo. 2013-51, at *84–102 (declining to make

a determination with respect to substantial compliance because it could

be established that the taxpayer’s noncompliance would be “excused on

the ground of reasonable cause,” but not before noting that “[w]e are

doubtful the . . . appraisal was in substantial compliance; nonetheless,

we express no opinion today as to whether the cited defects . . . would

individually or cumulatively fail to substantially comply with the

qualified appraisal regulation”).

The opinion of the Court cites Chrem v. Commissioner, T.C.

Memo. 2018-164, as consistent with the decision to not address the

remaining issues raised in the Motions concerning substantiation

issues, given the potential impact of a reasonable cause finding. It is

true that Chrem similarly declined to weigh in on the issue of

22

substantial compliance with the section 170(f)(11) substantiation

requirements given the potential mooting effect of a possible reasonable

cause finding. Chrem, T.C. Memo. 2018-164, at *25. However, Chrem is

inapposite. As indicated in the opinion of the Court, see op. Ct. pp. 16–17,

the Court’s decision in Chrem to deny the motions for partial summary

judgment was based not only on the potential effect of a reasonable

cause finding but also the fact that there could be factual overlap

between the reasonable cause issue and the remaining issue on which

the parties sought partial summary judgment, the applicability of the

assignment of income doctrine. Chrem, T.C. Memo. 2018-164, at *25. 1

By contrast, there is no potential factual overlap between the

reasonable cause issue and the substantial compliance issue in these

cases. 2 The questions raised by the parties about the applicability of the

substantiation rules and whether they were strictly or substantially

complied with are legal issues that may be answered by the Court

without trial. 3 And, given that the answers to those questions could

affect the parties’ settlement considerations and therefore the necessity

of trial, they should be answered before trial.

The absence of the second justification in Chrem for denying the

motions for partial summary judgment is particularly significant given

that the first justification supports ruling on the legal issues presented

by the parties even more strongly than it supports focusing on

reasonable cause. The application of the reasonable cause defense to

section 170(f)(11)(A)(i) is relevant only if there has been a failure to

comply with applicable substantiation requirements.

1 In Chrem, T.C. Memo. 2018-164, at *25–26, the Court explained that the

taxpayers might contend that no appraisal was required because the value of the

contributed stock was fixed. Because the Court would need to determine, after trial,

whether the sale of the stock by the contributee following the stock contribution was

sufficiently preordained for the assignment of income doctrine to apply to the

contribution, it would also need to determine whether, consequently, the sale was

sufficiently preordained to affect the treatment for purposes of section 170(f)(11) of the

contribution.

2 In these cases, there is no dispute that the contributed property was a type

of property with respect to which the section 170(f)(11) substantiation requirements

apply.

3 The issue of whether Mr. Thompson and Ms. Sandberg were appraisers whose

signatures on the appraisals were required is an exception. However, that factual issue

has no interaction with the factual issues underlying the reasonable cause defense

determination; neither does it affect the remainder of the analysis concerning strict or

substantial compliance, which is based on the face of the Forms 8283, Noncash

Charitable Contributions, prepared by Hobby Lobby Stores, Inc. (Hobby Lobby).

23

§ 170(f)(11)(A)(ii)(II). Accordingly, the Court has previously granted

partial summary judgment regarding the substantiation issue while

reserving judgment on the reasonable cause defense. See, e.g., Schweizer

v. Commissioner, T.C. Memo. 2022-102, at *5–6; Belair Woods, T.C.

Memo. 2018-159, at *21–24. If, instead of putting the cart before the

horse, the Court in this case were to similarly consider the statutory

predicates for applicability of the reasonable cause defense, and if it

were to find either that the substantiation rules do not apply with

respect to petitioners or that petitioners strictly or substantially

complied with the substantiation requirements, it would inherently be

unnecessary for the Court to decide whether there was reasonable cause

for noncompliance. Accordingly, the issues for trial would be narrowed,

further expediting litigation.

The opinion of the Court explains various matters that the Court

must evaluate if taxpayers claim to have relied on a professional,

including “the taxpayers’ reliance on the adviser’s advice,” see op. Ct.

p. 16, given that the advice is the crux of the defense. But of course,

petitioners have made only a skeletal argument for reasonable cause,

not even mentioning any facts necessary to determine whether there

was advice, nor invoking Rule 121(e) to indicate that trial testimony will

flesh them out. 4 Given the paucity of petitioners’ reasonable cause

4 Notably, petitioners claim reliance on Grant Thornton, LLP but neither

provide an affidavit from Grant Thornton addressing its advice nor suggest that

someone from Grant Thornton will testify to such advice, notwithstanding that this

Court’s caselaw finding reasonable cause based on reliance on an adviser generally

involves adviser input. Compare, e.g., Patacsil v. Commissioner, T.C. Memo. 2023-8,

at *18–19, and Kelly v. Commissioner, T.C. Memo. 2021-76, at *49–51, aff’d, 139 F.4th

854 (9th Cir. 2025), with Woodsum v. Commissioner, 136 T.C. 585, 593 (2011).

The opinion of the Court outlines numerous topics on which Grant Thornton’s

input, if it were available, could be useful, see op. Ct. note 13, illustrating the potential

scope of trial testimony that could potentially be rendered unnecessary by a ruling on

the legal issues. However, I disagree with the opinion of the Court that the views of

Grant Thornton, as opposed to the advice it provided, are relevant to the issue of

reliance, and I believe that the opinion of the Court inappropriately muddles the

substantial compliance analysis with the reasonable cause analysis in suggesting that

they are.

For example, the opinion of the Court specifically mentions the instructions to

the Form 8283, which petitioners have cited in support of their argument for strict or

substantial compliance, even though those instructions do not modify the relevant

statutory or regulatory provisions. Cf. Carpenter v. United States, 495 F.2d 175, 184

(5th Cir. 1974); Adler v. Commissioner, 330 F.2d 91, 93 (9th Cir. 1964), aff’g T.C. Memo.

1963-196; Casa De La Jolla Park, Inc. v. Commissioner, 94 T.C. 384, 396 (1990); Green

24

argument, there is no reason to place resolution of the factual reasonable

cause issue ahead of resolution of the statutorily preliminary and

similarly potentially dispositive but purely legal issues concerning

applicability of and compliance (strict or substantial) with the

substantiation requirements.

III. Motions Concerning Trust-Specific Issues

The opinion of the Court cursorily concludes that it is prudent to

defer resolving the issues presented in the Motions concerning issues

specific to the Trusts until after the full record is developed at trial. See

op. Ct. p. 17. In support thereof, it cites Kroh v. Commissioner, 98 T.C.

383, 390 (1982), for the proposition that it is a “drastic remedy” to deny

a party an opportunity for trial. However, the parties in these cases all

argue that the determination of the amounts of the deductions for which

the Trusts are eligible is an issue of law. Given that they therefore do

not seem to be seeking a trial (except, under petitioners’ view, with

respect to valuation), it is difficult to see how ruling on the legal issues

presented by the parties as they have requested would be a “drastic

remedy.”

The Court’s Rules provide that summary judgment “shall” be

granted if the movant shows there is no genuine dispute as to any

material fact and the movant is entitled to judgment as a matter of law

and that the Court should state the reasons for denying a motion. Rule

121(a)(2) and (3). Accordingly, the opinion of the Court reflects a

determination that a condition for summary judgment is not satisfied

but does not explain why the Court disagrees with all of the parties in

that regard. 5 If the Court does believe that there is a genuine dispute of

v. Commissioner, 59 T.C. 456, 458 (1972); Caterpillar Tractor Co. v. United States, 589

F.2d 1040, 1043 (Ct. Cl. 1978). Nevertheless, if Hobby Lobby actually relied on those

instructions in preparing its Form 8283, that could potentially bear on the issue of

whether there was reasonable cause independent of any purported reliance on Grant

Thornton. However, Grant Thornton’s advice, rather than merely its views, is what is

relevant to the reasonable cause arguments that petitioners have made thus far.

5 A nonexhaustive list of reasons why the Court might not be convinced by

either party is if the Court believes (1) petitioners are correct about both of their legal

arguments, but the Trusts’ deduction amounts are limited to bases in the contributed

artifacts under Treasury Regulation § 1.641(c)-1, in which case the valuation issues to

be addressed at trial will be irrelevant to the Trusts, (2) petitioners are correct about

the Trusts’ being entitled to partial deductions but not about Green v. United States,

880 F.3d 519 (10th Cir. 2018), with the same result, and/or (3) the Trusts’ entitlement

to deductions is subject to the substantiation requirements, such that the reasonable

cause issue to be addressed at trial will be relevant to the Trusts.

25

material fact, it would behoove the Court to make the parties aware of

that in order to permit informed decision making with respect to and

preparation for trial. And if the Court has determined that all of the

parties are incorrect as a matter of law, it would likewise be appropriate

to state as much for clarity.

IV. Conclusion

For the reasons discussed herein, I respectfully disagree with the

refusal of the opinion of the Court to address any of the issues raised by

the parties in the Motions other than reasonable cause. I agree with the

opinion of the Court that there is a genuine dispute of material fact with

respect to reasonable cause, even if just barely, and therefore agree that

none of the Motions should be granted in full. However, because I would

not deny all of the Motions in full, I dissent.