Amicus Curiae Brief — Madeleine Pickens, Petitioner v. United States

No. 23-571

IN THE

Supreme Court of the United States

__________________

MADELINE PICKENS,

Petitioner,

v.

UNITED STATES,

Respondent.

__________________________

On Petition for a Writ of Certiorari to the

United States Court of Appeals for the

Ninth Circuit

__________________

BRIEF OF NATIONAL TAXPAYERS UNION

FOUNDATION AS AMICUS CURIAE

IN SUPPORT PETITIONER

__________________

JOSEPH D. HENCHMAN

Counsel of Record

TYLER MARTINEZ

NATIONAL TAXPAYERS

UNION FOUNDATION

122 C Street N.W., #700

Washington, D.C. 20001

jbh@ntu.org

(703) 683-5700

December 19, 2023

i

TABLE OF CONTENTS

TABLE OF CONTENTS .............................................. i

TABLE OF AUTHORITIES ....................................... ii

INTEREST OF AMICUS CURIAE ............................ 1

SUMMARY OF THE ARGUMENT ........................... 2

ARGUMENT ............................................................... 3

I. THE NINTH CIRCUIT’S DECISION

CREATES DANGEROUS DIVISION. ................... 4

II.

THE QUESTION PRESENTED IN

THIS CASE IS IMPORTANT TO EVERY

TAXPAYER. ............................................................ 9

CONCLUSION.......................................................... 12

ii

TABLE OF AUTHORITIES

Cases

926 N. Ardmore Ave., LLC v. Cnty. of Los Angeles,

396 P.3d 1036 (Cal. 2017) ....................................... 7

Appeal of Clayton-Marcus Co.,

210 S.E.2d 199 (N.C. 1974) ..................................... 8

Arbern-Wilmington, Inc. v. Dir. of Rev.,

596 A.2d 1385 (Del. 1991) ....................................... 8

Avnet, Inc. v. Washington Dep’t of Revenue,

384 P.3d 571 (Wash. 2016) ..................................... 7

Basin Elec. Power Co-op. v. Bowen,

979 P.2d 503 (Wyo. 1999) ........................................ 9

Bassett v. DeRentis,

446 A.2d 763 (R.I. 1982) .......................................... 8

Beard v. S.C. Tax Comm’n,

95 S.E.2d 628 (S.C. 1956)........................................ 8

Boechler v. Comm’r Int. Rev.,

596 U.S. ___, 142 S.Ct. 1493 (2022)........................ 1

Boyne USA, Inc. v. Dep’t of Revenue,

490 P.3d 1240 (Mont. 2021) .................................... 7

Bullock v. Statistical Tabulating Corp.,

549 S.W.2d 166 (Tex. 1977) .................................... 9

Busse v. C.I.R.,

479 F.2d 1147 (7th Cir. 1973) ................................. 6

Canty v. Idaho State Tax Comm’n,

59 P.3d 983 (Idaho 2002) ........................................ 7

CIC Services, LLC v. Int. Rev. Serv.,

593 U.S. ___, 141 S. Ct. 1582 (2021)....................... 1

iii

City of Phoenix v. Orbitz Worldwide Inc.,

448 P.3d 275 (Ariz. 2019) ........................................ 7

Clajon Gas Co., L.P. v. C.I.R.,

354 F.3d 786 (8th Cir. 2004) ................................... 6

Commonwealth v. Carter,

92 S.E.2d 369 (Va. 1956) ......................................... 9

Commty. Telecomm. Corp. v. State Tax Ass’r,

684 A.2d 424 (Me. 1996) ......................................... 8

Consolidation Coal Co. v. Krupica,

254 S.E.2d 813 (W.Va. 1979) .................................. 9

Dep’t of State Rev. v. Crown Dev. Co.,

109 N.E.2d 426 (Ind. 1952) ..................................... 8

Duke Energy Nat. Gas Corp. v. Comm’r,

172 F.3d 1255 (10th Cir. 1999) ............................... 6

Exxon Mobil Corp. & Affiliated Cos. v. C.I.R.,

689 F.3d 191 (2d Cir. 2012)..................................... 5

First Berkshire Bus. Trust v. Comm’r, N.H. Dep’t of

Rev. Admin.,

13 A.3d 232 (N.H. 2010) .......................................... 8

George v. Scent,

346 S.W. 2d 784 (Ky. 1961) ..................................... 8

Gould v. Gould,

245 U.S. 151 (1917) ......................................... 4, 5, 6

Harrah’s Operating Co. v. State, Dep’t of Taxation,

321 P.3d 850 (Nev. 2014) ........................................ 7

Hassett v. Welch,

303 U.S. 303 (1938) ............................................. 5, 6

iv

Hudson Cnty. Chamber of Comm. v. City of Jersey

City,

708 A.2d 690 (N.J. 1998) ......................................... 9

In re City of Wichita,

59 P.3d 336 (Kan. 2002) .......................................... 8

Ingersoll Milling Mach. Co. v. Dep’t of Rev.,

90 N.E.2d 747 (Ill. 1950) ......................................... 8

Ivory Homes, Inc. v. Utah State Tax Comm’n,

266 P.3d 751 (Utah 2011) ....................................... 9

Kisor v. McDonough,

995 F.3d 1347 (Fed. Cir. 2021) ............................... 5

Lee v. Walgreen Drug Stores Co.,

28 So. 2d 535 (Fla. 1942) ......................................... 8

McLane Minn., Inc. v. Comm’r of Rev.,

773 N.W.2d 289 (Minn. 2009) ................................. 8

Mich. Bell Tel. Co. v. Dep’t of Treasury,

518 N.W.2d 808 (Mich. 1994).................................. 8

Midland Fin. Corp. v. Wis. Dep’t of Rev.,

341 N.W.2d 397 (Wis. 1983).................................... 9

Miss. River Transmission Corp. v. Weiss,

65 S.W.3d 867 (Ark. 2002) ...................................... 8

Molycorp, Inc. v. State Corp. Comm’n,

624 P.2d 1010 (N.M. 1981)...................................... 8

Moore v. United States,

U.S. No. 22-800........................................................ 1

Naumann v. Iowa Prop. Ass’mnt. Appeal Bd.,

791 N.W.2d 258 (Iowa 2010) ................................... 8

Ne. Pa. Imaging Ctr. v. Pennsylvania,

35 A.3d 752 (Pa. 2011) ............................................ 8

v

Polselli v. Internal Revenue Serv.,

598 U.S. 432 (2023) ................................................. 1

Portland Pipe Line Corp. v. Morrison,

110 A.2d 700 (Vt. 1955) ........................................... 9

Prudential Ins. Co. of Am. v. Comm’r of Rev.,

709 N.E.2d 1096 (Mass. 1999) ................................ 8

Royal Caribbean Cruises, Ltd. v. United States,

108 F.3d 290 (11th Cir. 1997) ................................. 6

Saginaw Bay Pipeline Co. v. United States,

338 F.3d 600 (6th Cir. 2003) ................................... 6

Sch. St. Assocs. Ltd. v. District of Columbia,

764 A.2d 798 (D.C. 2001) ........................................ 8

Sioux Valley Hosp. Ass’n v. State,

519 N.W.2d 334 (S.D. 1994) .................................... 8

State Dep’t of Ass’mnts & Taxation v. Consol. Coal

Sales Co.,

855 A.2d 1197 (Md. 2004) ....................................... 8

State ex rel. Knox v. Union Tank Car Co.,

119 So. 310 (Miss. 1928) ......................................... 8

State v. Camp,

6 S.E.2d 299 (Ga. 1939)........................................... 8

Suffolk County Fed. Sav. & Loan Ass’n v. Bragalini,

159 N.E.2d 164 (N.Y. 1959) .................................... 8

Sullivan v. Union & New Haven Trust Co.,

158 A.2d 174 (Conn. 1960) ...................................... 8

Transponder Corp. of Denver, Inc. v. Property Tax

Admin’r,

681 P.2d 499 (Colo. 1984)....................................... 8

vi

Travelocity.com, L.P. v. Dir. of Taxation,

346 P.3d 157 (Haw. 2015) ....................................... 7

Union Oil Co. of Cal. v. Dep’t of Rev.,

560 P.2d 21 (Alaska 1977) ...................................... 7

United Air Lines, Inc. v. State Tax Comm’n,

377 S.W.2d 444 (Mo. 1964) ..................................... 8

United Dominion Indus., Inc. v. United States,

532 U.S. 822 (2001) ................................................. 5

United Gas Corp. v. Fontenot,

129 So.2d 776 (La. 1961) ......................................... 8

United States v. King Trailer Co.,

350 F.2d 947 (9th Cir. 1965) ................................... 6

United States v. Marshall,

798 F.3d 296 (5th Cir. 2015) ................................... 5

United States v. Merriam,

263 U.S. 179 (1923) ............................................. 5, 6

W. Auto Supply Co. v. Okla. Tax Comm’n,

328 P.2d 414 (Okl. 1958) ......................................... 8

W. Gas Res., Inc. v. Heitkamp,

489 N.W.2d 869 (N.D. 1992) ................................... 8

White v. Roden Elec. Supply Co., Inc.,

536 S.W.2d 346 (Tenn. 1976) .................................. 8

Zimmer v. Hagerman,

91 N.E.2d 254 (Ohio 1950) ...................................... 8

Statutes

26 U.S.C. § 6324(a)(2) ................................... 2, 3, 4, 11

26 U.S.C. § 6501(a) ................................................... 10

vii

26 U.S.C. § 6501(e)(1)(A) .......................................... 10

Inflation Reduction Act of 2022, Pub. L. No. 117-169

§ 10301, 136 Stat. 1818, 1831 (2022). ................... 10

Rules

S. Ct. R. 10(a) .............................................................. 4

S. Ct. R. 10(c) .............................................................. 9

Other Authorities

Cons. Fin’l Protect. Bureau, What is a revocable

living trust? (Jun. 27, 2023)

https://www.consumerfinance.gov/ask-cfpb/what-isa-revocable-living-trust-en-1775/ ........................... 4

Statement of Pete Sepp, President, National

Taxpayers Union, Comm. on Finance, U.S. Senate,

7 (May 16, 2023)

https://www.ntu.org/library/doclib/2023/05/051623Pete-Sepp-Testimony.pdf ...................................... 11

1

INTEREST OF AMICUS CURIAE1

Founded in 1973, the National Taxpayers Union

Foundation (NTUF) is a non-partisan research and

educational organization dedicated to showing

Americans how taxes, government spending, and

regulations affect everyday life. NTUF advances

principles of limited government, simple taxation, and

transparency on both the state and federal levels.

NTUF’s Taxpayer Defense Center advocates for

taxpayers in the courts, producing scholarly analyses

and engaging in direct litigation and amicus curiae

briefs upholding taxpayers’ rights, challenging

administrative overreach by tax authorities, and

guarding against unconstitutional burdens on

interstate commerce. See, e.g., Moore v. United States,

U.S. No. 22-800 (pending decision); Polselli v. Internal

Revenue Serv., 598 U.S. 432 (2023); Boechler v.

Comm’r Int. Rev., 596 U.S. ___, 142 S.Ct. 1493 (2022);

and CIC Services, LLC v. Int. Rev. Serv., 593 U.S. ___,

141 S. Ct. 1582 (2021). Accordingly, Amicus has an

institutional interest in this case.

1 Pursuant to Supreme Court Rule 37, counsel for Amicus

represents that none of the parties or their counsel, nor any other

person or entity other than Amicus or its counsel, made a

monetary contribution intended to fund the preparation or

submission of this brief. Counsel for Amicus further certifies

timely notice was provided to all parties of the intent to file this

brief.

2

SUMMARY OF THE ARGUMENT

The Ninth Circuit’s decision below is so egregious

as to hit two criteria for review under Supreme Court

Rule 10. The decision below creates a deep circuit split

among the federal Courts of Appeals. Its holding also

stands at odds with how forty-nine state supreme

courts handle such matters. And the decision manages

to do all this while mishandling a matter of national

importance to taxpayers. This Court should grant the

writ of certiorari for Ms. Pickens’ case.

This Court has long held that ambiguities in tax

statutes should be construed in favor of the taxpayer.

The circuit courts apply this rule regularly; indeed,

this was the rule of the Ninth Circuit until this case.

And forty-nine states and the District of Columbia

apply this rule as well (Oregon being the sole

jurisdiction to not favor the taxpayer). The decision

below therefore creates a deep division among the

federal courts and the state courts.

On the merits, this case presents a question of

importance to taxpayers across the country. The

government’s legal theory is egregious in practice. As

a thinly veiled money grab into whatever deep pockets

it can find, the IRS argues that the time limitation in

26 U.S.C. § 6324(a)(2) allows it to go after a widow’s

inheritance because a trust run by a stepson becomes

insolvent. Taxpayers everywhere of almost every

income level should worry that the IRS will go after

their spouse, kids, or other relatives years later.

This Court should therefore grant review of Ms.

Pickens’ case and reject the government’s money grab.

3

ARGUMENT

At the center of this case is how to interpret

26 U.S.C. § 6324(a)(2), which provides that estates

taxes may be paid by someone “who receives, or has

on the date of the decedent’s death, property included

in the gross estate.” Such a person must pay taxes on

“the extent of the value, at the time of the decedent’s

death, of such property.” Id. Arguably, § 6324(a)(2) is

ambiguous—the decision below was split with a

strong dissent from Judge Ikuta on how to apply the

language in this case. Compare App. 16a (“We

conclude that the most natural reading of the

statutory text… supports the United States’

interpretation.”) with 65a (Ikuta, J., dissenting) (“The

majority and the government effectively concede that

their interpretation of § 6324(a)(2) is not logical…”).

Normally, the courts read ambiguous tax statutes

in favor of the taxpayer. This is good policy because

the government should clearly set out who owes taxes,

when they owe taxes, and how much to pay. This

Court, therefore, has long held that ambiguity favors

the taxpayer. The Circuits and almost every state

have long applied that rule. The Ninth Circuit now

departs from its earlier adherence to that rule on a

novel legal theory from the government. This

dangerous decision, split from the rest of the weight of

tax law, must be addressed.

This case also presents an important legal

question to resolve, to the benefit of many taxpayers

and their end-of-life planning. Living trusts, such as

the one at issue here, are a common method of

assuring assets go where a decadent wants. App. 6a–

4

7a; see also Cons. Fin’l Protect. Bureau, What is a

revocable

living

trust?

(Jun.

27,

2023)

https://www.consumerfinance.gov/ask-cfpb/what-is-arevocable-living-trust-en-1775/. But the government’s

ability here to go after funds transferred and settled

fifteen years earlier is dangerous. Reading 26 U.S.C.

§ 6324(a)(2) narrowly to reject this open-ended tax

liability is key for assuring taxpayers that the

government cannot go after them years later.

I.

THE

NINTH

CIRCUIT’S

DECISION

CREATES DANGEROUS DIVISION.

The Ninth Circuit held below that the longstanding rule of tax statutory construction in favor of

the taxpayer applies only to criminal prosecution as

an extension of the doctrine of lenity. See App.45a. In

addition to being directly contrary to this Court’s

holdings, the Ninth Circuit’s decision below creates a

major circuit split and warrants review under

Supreme Court Rule 10(a). It also creates a rift

between federal tax cases and state tax cases—

including within the Ninth Circuit—warranting this

Court’s review.

Section 6324(a)(2) should probably be read to

apply only at the time of the disbursement of funds

after someone dies or a trust ends. It could certainly

be argued that the language is ambiguous. But the

United States Courts of Appeals have long held

together that ambiguous tax statutes must be read to

favor the taxpayer.

This Court has long held that ambiguities in tax

statutes be construed in favor of the taxpayer. In

Gould v. Gould, 245 U.S. 151, 153 (1917), this Court

5

recognized that “the established rule” in “the

interpretation of statutes levying taxes” is to not go

“beyond the clear import of the language used” in the

statute. Thus, “[i]n case of doubt [tax statutes] are

construed most strongly against the government, and

in favor of the citizen.” Id. (collecting cases since 1842)

(emphasis added). That holding was affirmed just a

few years later. United States v. Merriam, 263 U.S.

179, 188 (1923) (applying Gould, 245 U.S. at 153) (“If

the words are doubtful, the doubt must be resolved

against the government and in favor of the

taxpayer.”); see also Hassett v. Welch, 303 U.S. 303,

314 (1938) (applying Gould, and holding that “if doubt

exists as to the construction of a taxing statute, the

doubt should be resolved in favor of the taxpayer…”).

Members of this Court continue to apply this rule. See,

e.g., United Dominion Indus., Inc. v. United States,

532 U.S. 822, 838–39 (2001) (Thomas, J., concurring)

(colleting cases including Merriam).

The Federal Circuit in 2021 mostly recently

applied this rule. See, e.g., Kisor v. McDonough, 995

F.3d 1347, 1369 (Fed. Cir. 2021) (applying Gould and

Merriam). The other circuits agree:

•

•

Second Circuit: Exxon Mobil Corp. & Affiliated

Cos. v. C.I.R., 689 F.3d 191, 199 (2d Cir. 2012)

(applying Merriam and noting the Circuit is

“particularly mindful” of this rule);

Fifth Circuit: United States v. Marshall, 798

F.3d 296, 319 (5th Cir. 2015) (recognizing that

“[r]eliance on legislative history is suspect

even if a tax statute is ambiguous because” of

the “longstanding canon of construction that if

the words of a tax statute are doubtful, the

doubt must be resolved against the

6

•

•

•

•

•

government and in favor of the taxpayer.””)

(collecting cases, including Merriam);

Sixth Circuit: Saginaw Bay Pipeline Co. v.

United States, 338 F.3d 600, 604 (6th Cir.

2003) (recognizing that “if doubt exists as to

the construction of a taxing statute, the doubt

should be resolved in favor of the taxpayer”);

Seventh Circuit: Busse v. C.I.R., 479 F.2d

1147, 1150–51 (7th Cir. 1973) (applying

Merriam and holding that “[w]e do not

consider that the law in this area of statutory

construction has changed appreciably”);

Eighth Circuit: Clajon Gas Co., L.P. v. C.I.R.,

354 F.3d 786, 789 (8th Cir. 2004) (applying the

Sixth Circuit’s decision in Saginaw Bay,

among others);

Tenth Circuit: Duke Energy Nat. Gas Corp. v.

Comm’r, 172 F.3d 1255, 1260 n.7 (10th Cir.

1999) (applying Hassett); and

Eleventh Circuit: Royal Caribbean Cruises,

Ltd. v. United States, 108 F.3d 290, 294 (11th

Cir. 1997) (per curiam) (collecting cases,

including Gould, and applying “the general

rule of construction that ambiguous tax

statutes are to be construed against the

government and in favor of the taxpayer”).

The Ninth Circuit thus created a federal Circuit split.

It stands against the Federal, Fifth, Sixth, Seventh,

Eighth, Tenth and Eleventh Circuits. The decision

below also, incidentally, overturned the Ninth’s own

well-established rule. Compare 44a–46a with United

States v. King Trailer Co., 350 F.2d 947, 948 (9th Cir.

1965) (applying Merriam and holding that “even

should a reasonable doubt exist, our duty is to resolve

7

it in favor of the taxpayer”). This is untenable for the

future of tax litigation.

The decision below also creates drives a wedge

with forty-nine states, including most of the Ninth

Circuit’s jurisdiction, that construe ambiguous tax

statutes in favor of the taxpayer. Montana’s Supreme

Court in 2021 held that “tax statutes are to be strictly

construed against the taxing authority and in favor of

the taxpayer.” Boyne USA, Inc. v. Dep’t of Revenue,

490 P.3d 1240, 1243 (Mont. 2021) (citation omitted,

cleaned up). Two years before that, Arizona applied

the pro-taxpayer rule. See City of Phoenix v. Orbitz

Worldwide Inc., 448 P.3d 275, 282 (Ariz. 2019). The

California Supreme Court reaffirmed that, “a [tax]

statute whose language is unclear should be construed

to favor the taxpayer.” 926 N. Ardmore Ave., LLC v.

Cnty. of Los Angeles, 396 P.3d 1036, 1041 (Cal. 2017).

Washington held similar as recently as 2016. See

Avnet, Inc. v. Washington Dep’t of Revenue, 384 P.3d

571, 574 (Wash. 2016). Hawaii reaffimed this basic

holding in 2015. See, e.g., Travelocity.com, L.P. v. Dir.

of Taxation, 346 P.3d 157, 190 n.47 (Haw. 2015).

Nevada’s Supreme Court reaffirmed the principle as

well in 2014. Harrah’s Operating Co. v. State, Dep’t of

Taxation, 321 P.3d 850, 852 (Nev. 2014). Idaho applies

this rule as well. See, e.g., Canty v. Idaho State Tax

Comm’n, 59 P.3d 983, 987 (Idaho 2002). Alaska

follows this rule as well. See, e.g., Union Oil Co. of Cal.

v. Dep’t of Rev., 560 P.2d 21, 25 (Alaska 1977) (“[W]e

follow the general rule of construction of tax statutes

which requires that, where possible, doubts be

resolved in favor of the taxpayer.”). Oregon is the only

state in the country to not apply this statutory

construction rule. Forty-nine states and the District of

8

Columbia protect the taxpayer from ambiguous

revenue statutes.2

2 For the other state supreme courts applying this rule, see also

Miss. River Transmission Corp. v. Weiss, 65 S.W.3d 867, 873

(Ark. 2002); Transponder Corp. of Denver, Inc. v. Property Tax

Admin’r, 681 P.2d 499, 503 (Colo. 1984); Sullivan v. Union &

New Haven Trust Co., 158 A.2d 174, 175 (Conn. 1960); ArbernWilmington, Inc. v. Dir. of Rev., 596 A.2d 1385, 1387 (Del. 1991);

Sch. St. Assocs. Ltd. v. District of Columbia, 764 A.2d 798, 805

(D.C. 2001); Lee v. Walgreen Drug Stores Co., 28 So. 2d 535, 536

(Fla. 1942); State v. Camp, 6 S.E.2d 299, 216-17 (Ga. 1939);

Ingersoll Milling Mach. Co. v. Dep’t of Rev., 90 N.E.2d 747, 751

(Ill. 1950); Dep’t of State Rev. v. Crown Dev. Co., 109 N.E.2d 426,

428 (Ind. 1952); Naumann v. Iowa Prop. Ass’mnt. Appeal Bd., 791

N.W.2d 258, 262 (Iowa 2010); In re City of Wichita, 59 P.3d 336,

343 (Kan. 2002); George v. Scent, 346 S.W. 2d 784, 789 (Ky. 1961);

United Gas Corp. v. Fontenot, 129 So.2d 776, 781 (La. 1961);

Prudential Ins. Co. of Am. v. Comm’r of Rev., 709 N.E.2d 1096,

1100 (Mass. 1999); Commty. Telecomm. Corp. v. State Tax Ass’r,

684 A.2d 424, 426 (Me. 1996); State Dep’t of Ass’mnts & Taxation

v. Consol. Coal Sales Co., 855 A.2d 1197, 1207 (Md. 2004); Mich.

Bell Tel. Co. v. Dep’t of Treasury, 518 N.W.2d 808, 811 (Mich.

1994); McLane Minn., Inc. v. Comm’r of Rev., 773 N.W.2d 289,

296 (Minn. 2009); State ex rel. Knox v. Union Tank Car Co., 119

So. 310, 312 (Miss. 1928); United Air Lines, Inc. v. State Tax

Comm’n, 377 S.W.2d 444, 448 (Mo. 1964); W. Auto Supply Co. v.

Okla. Tax Comm’n, 328 P.2d 414, 420 (Okla. 1958); First

Berkshire Bus. Trust v. Comm’r, N.H. Dep’t of Rev. Admin., 13

A.3d 232, 235 (N.H. 2010); Suffolk County Fed. Sav. & Loan Ass’n

v. Bragalini, 159 N.E.2d 164, 166 (N.Y. 1959); Appeal of ClaytonMarcus Co., 210 S.E.2d 199, 202 (N.C. 1974); Molycorp, Inc. v.

State Corp. Comm’n, 624 P.2d 1010, 1011 (N.M. 1981); W. Gas

Res., Inc. v. Heitkamp, 489 N.W.2d 869, 873 (N.D. 1992); Zimmer

v. Hagerman, 91 N.E.2d 254, 256 (Ohio 1950); Ne. Pa. Imaging

Ctr. v. Pennsylvania, 35 A.3d 752, 758 (Pa. 2011); Bassett v.

DeRentis, 446 A.2d 763, 764–65 (R.I. 1982); Beard v. S.C. Tax

Comm’n, 95 S.E.2d 628, 634 (S.C. 1956); Sioux Valley Hosp. Ass’n

v. State, 519 N.W.2d 334, 336 (S.D. 1994); White v. Roden Elec.

Supply Co., Inc., 536 S.W.2d 346, 348 (Tenn. 1976); Bullock v.

9

The Ninth Circuit in this case shed a very

important taxpayer protection: that ambiguous tax

statutes should be construed against the government.

In so doing, the decision below created a major fissure

in both federal and state case law. This leaves

taxpayers unsure of whether the government will be

able to use novel theories in the future based on

ambiguous provisions of the government’s own

making. This Court should take up this case to

reaffirm and strengthen its long-standing rules of

construction that protect taxpayers.

II. THE QUESTION PRESENTED IN THIS

CASE

IS

IMPORTANT

TO

EVERY

TAXPAYER.

This case presents the quintessential issue of

national importance that needs clarity from this

Court. See S. Ct. R. 10(c). Taxpayers everywhere need

to know what their tax liability is and when that

window closes. If left to stand, the IRS now can go

looking for deep pockets years after a trust or other

instrument pays out. The decision of the court below,

Statistical Tabulating Corp., 549 S.W.2d 166, 169 (Tex. 1977);

Ivory Homes, Inc. v. Utah State Tax Comm’n, 266 P.3d 751, 759–

60 (Utah 2011); Portland Pipe Line Corp. v. Morrison, 110 A.2d

700, 701 (Vt. 1955); Commonwealth v. Carter, 92 S.E.2d 369, 373

(Va. 1956); Consolidation Coal Co. v. Krupica, 254 S.E.2d 813,

816 (W.Va. 1979); Midland Fin. Corp. v. Wis. Dep’t of Rev., 341

N.W.2d 397, 400 (Wis. 1983). A couple states consider legislative

intent but still start with the rule that ambiguous tax statutes

are construed in favor of the taxpayer. See Hudson Cnty.

Chamber of Comm. v. City of Jersey City, 708 A.2d 690, 697–98

(N.J. 1998); Basin Elec. Power Co-op. v. Bowen, 979 P.2d 503, 509

(Wyo. 1999).

10

in blessing this system, was so anti-taxpayer as to

cause concern for tax filers across America.

Tax law requires some stability. That is the

reason that, at some point, the IRS can no longer audit

a taxpayer’s filings. The Service generally has only

three years to open an audit. 26 U.S.C. § 6501(a).

Adjustments for underreporting can happen for up to

six years. See, e.g., 26 U.S.C. § 6501(e)(1)(A).

But in this instance the IRS went after a widow

fifteen years after her husband’s death and a dozen

years after she received her share of the trust’s

property. Pet. 11; cf. App. 8a, 11a, and 12a. The

government failed to monitor its payment plan

agreement with John Michael Paulson, an alleged

spendthrift trustee who has defaulted, and is now

imposing the costs of this failure on any deep pockets

it can find. Pet. 10; cf. App. 11a.

No wonder taxes are scary to the average person.

Tax law is complex, and its impact is in nearly every

area of a person’s public life. Worse, the taxpayer must

present their entire financial life to the IRS. But every

taxpayer deserves to know when their liability will

end.3

This issue may get worse with the recent influx of

enforcement cash from the Inflation Reduction Act of 2022

(“IRA”), which included $80 billion for the IRS. Inflation

Reduction Act of 2022, Pub. L. No. 117-169 § 10301, 136 Stat.

1818, 1831 (2022). The great majority of the IRA’s spending for

tax work—$45.6 billion—is slated for enforcement, with another

$25 billion for operational support for enforcement and other

duties. Id. at 1832. Only $3 billion was to improve taxpayer

services, like answer the phones, reply to letters, and taxpayer

assistance. Id. The funding shows the priorities of the IRS going

forward. See, Statement of Pete Sepp, President, National

3

11

This case is a clean vehicle to resolve the

underlying interpretation of 26 U.S.C. § 6324(a)(2).

Ms. Pickens was not in charge of the trust, had no

ability to compel proper tax payments (indeed, she

had to fight for her own funds), and reversing the

Ninth Circuit’s decision below will mean she owes

nothing. See Pet. 34-35. With such compelling facts

and clean procedural posture, this Court should

resolve the merits of Ms. Pickens’ claims.

The specter of tax enforcement, combined with tax

law’s complexity, garners a visceral reaction in

ordinary citizens and businesses. Any ambiguity

should favor the taxpayer. This is all the more so when

it is clear that the government is simply looking for

deep pockets when the trust’s assets ran out.

Ms. Pickens is a bystander in a tax action that should

focus on the spendthrift trustee, not the widow.

Taxpayers Union, Comm. on Finance, U.S. Senate, 7 (May 16,

2023) https://www.ntu.org/library/doclib/2023/05/051623-PeteSepp-Testimony.pdf.

12

CONCLUSION

For the foregoing reasons, Amicus requests that

this Court grant a writ of certiorari and reverse the

decision below.

Respectfully submitted,

JOSEPH D. HENCHMAN

Counsel of Record

TYLER MARTINEZ

NATIONAL TAXPAYERS

UNION FOUNDATION

122 C Street N.W., #700

Washington, D.C. 20001

jbh@ntu.org

(703) 683-5700

December 19, 2023