# Petition — Robinson v. United States

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition
- **Published:** January 1, 1982
- **Citation:** 459 U.S. 970

## Text

Office - Sunreme Court, U.S.

82-389 FILED

me —+—388 1? 1982
No. CLERK

IN THE

SUPREME COURT OF THE UNITED STATES

MYRA B. ROBINSON, Petitioner
versus
UNITED STATES OF AMERICA, Respondent

On Petition for Writ of Certiorari
To the United States Court of A
For the Fifth Circuit

Petition for Writ of Certiorari

Port Worth Brief Printing Co., 610 South Jennings Street, Fort Worth, Texas 76104 Phone 617 532-4070

i

Question: Presented for Review

The only question presented for review is whether the
petitioner, MYRA B. ROBINSON, herein referred to as
the “petitioner,” made a taxable gift when, in 1976, she
gratuitously surrendered a special testamentary power
granted to her under Paragraph 6 of the widow’s election
wil! of her husband who died in 1972. Petitioner had
elected, in 1972, to accept under such will, which dis-
posed of her community interest. It was stipulated that
the value of what she received by such 1972 election
exceeded the value of what she surrendered thereby.

Parties

There are no parties hereto other than those named in
the caption of the case.

TABLE OF CONTENTS

Page

Questions Presented for Review ...........600ccceceseeeceues i
PEs dald cect ntenvavcnensaddgdbnhedtseiiacnovecdvcodantus i
EE 'é on dee ss scdphdantcdabhasees van sdteacects iv
Official Reports in Courts Below ..... 2.0... .00ccceceeeeesewes 1
Grounds for Invoking Jurisdiction ...............00ceeeeceeees 1
Constitutional Provisions, Statutes and Regulations Involved ...2
PGR UND GMNED o dcksuclitnevedcadadenceceseuhscccuccd 3
Basis for Tax Court’s Jurisdiction ............0.0escceeeeeeees 6
Argument in Support of Writ ............0ccceeceeeeeeeeeeees 6
PT cr dntiunt lank vides pbdeden> ocensdthavcasesecdabe 13
IT LUMAR uhad son one dave bas donk dheadhavcccecsetaces 13
MUL co's space wdceee vets rbedat nods cobensdiod 13
IED Uc rnkdndhbiig ths doptdnne thecvktessoeken 14

TABLE OF AUTHORITIES
Page

Cases:
Burnet v. Guggenheim, 288 U.S. 280, 286, 53 S.Ct. 369,

Pee FE aes PU CR CED eV bbe. ducacscvcevssecccese 7, 10
Chase National Bank, 25 T.C. 617 (1955), rev'd on other

grounds sub nom Commissioner v. Chase Manhattan

Bank, 259 F.2d 231 (6th Cir., 1968) ... 2... 2.2... cece eeeeeee 10
Commissioner v. Nelson, 396 F.2d 519 (2nd Cir., 1968) ...... 7,10
Commissioner v. Siegel, 250 F.2d 339 (9th Cir., 1957) ........... 4
Commissioner v. Walston, 168 F.2d 211 (4th Cir., 1948),

affirming a divided Tax Court, 8 T.C. 72 (1947) .............. 12
Estate of Emma Bressani, 45 T.C. 373 (1966) ............. 10, 12
Estate of Martha R. Campbell, 59 T.C. 133 (last paragraph

ERTIES i is bas uees se dab ekehihecdivcdnendacuesrs 8
Estate of Christ v. Commissioner, 480 F.2d 171

SAS MEE Asks in ods 04W 4604 cab N Cdbe Vs ceccen vee ti 7, 10
Estate of Davis v. Commissioner, 440 F.2d 896

SS MEE Cocads onde ck ds ickbwethewe ss’ ccdvceseia 7,10
Estate of Gertrude Friedman, 40 T.C. 714 (1963) ........... 7, 10
Estate of Robert Rodger Glen, 45 T.C. 323 (1966)

DEE Vibavcssbacednvbdreneetetbedvcnccchesatens 7,10
Estate of Dora N. Marshall, 51 T.C. 696 at 701 (1969) .......... &

Estate of Isabelle M. Sparling, 60 T.C. 330 (1973),
rev'd on other grounds, 552 F.2d 1340 (9th Cir., 1977) .... 8, 10

Estate of Steinman v. Commissioner, 69 T.C. 804

SDS dotiachs ch dbbbkpisdetacals od ukovasenscntecs 12
First National Bank of Chicago, Trustee v. Commissioner,

SE Be TO, FIG cine iswinc cdc ccsccsvcccccccncnve 8
Greer v. U.S., 448 F.2d 287 at 945 (4th Cir., 1971) ............. 10

TABLE OF AUTHORITIES (Continued)

Page
Jewett v. Commissioner, U.S. , 102 S.Ct.

Se, SE MA UO CHOU 2a vin w wda ee ncbwedeuectoccciccuve’ 7
Lehman v. Commissioner, 109 F.2d 99 (2nd Cir., 1940),

cert. den. 310 U.S. GBT (IBEG) 2... nce cece ccc ccccncccccceves 8
Merrill uv. Fahs, 324 U.S. 308 (1945) .............666. SH Ry Ce 9
ie Bc FPS GS TA, SSO. sev cca ceebbs or sccvcctvsies 10
Old Colony Trust Co. v. U.S., 423 F.2d 601 at 603

EE nd 0b bo docs nab db ducked dhbwn Kita éteces thee cea 11
Sanford’s Estate v. Commissioner, 308 U.S. 39 (1989) .......... 6
Schultz v. U.S., 33 A.F.T.R.2d 74-199 (4th Cir., 1974) .......... s
Seaman v. U.S., 156 F.2d 719 (7th Cir., 1946) ..............64.. s
Self v. U.S., 142 F. Supp. 989 (Ct. Ci., 1956) ............00005- 12
Marva Trotter Barrow Spaulding, 27 T.C. 479 (1956) aff'd on

other grounds sub nom First National Bank of Chicago,

Trustee v. Commissioner, 255 F.2d 759 (7th Cir., 1958) ........ x
Augustus E. Staley, 41 B.T.A. 752 (1940) ........ 0.6 ccc eee eees S
Zillah Mae Turman, 35 T.C. 1123 (1961) ....... 0.6.6.6 e cee ee 10
U.S. v. Byrum, 408 U.S. 125 (1972), esp. footnote 6 ........... ll
U.S. v. Field, 266 U.S. 257 (1921) ..... ccc ccccccccsccccccvess 12
U.S. v. Gordon, 406 F.2d 332 at 341 et seq., esp. footnote

ED Sint oube ke bd cbdbh Sb abande osotds cereus 7,9
U.S. v. Stage, 376 U.S. UB (19GB) 2.2... cece eee e cece reneces 8
Vardell’s Estate v. Commissioner, 307 F.2d 688

ED saw db onto nen Seder ebeeraa dees cerachewes 7,10
Winthrop v. Meisels, 281 F.2d 694 (2nd Cir., 1940) ............ 10
Constitution:

Wee Cees, Gee. Bee BOR Bic. ccc cevhubeccacdbacasscden 1

TABLE OF AUTHORITIES (Continued)

Page
Statutes, Rules, Regulations and Other Authorities:
Supreme Court Rule 17, Paragraphs 1(a) and l(c) .............. 2
A IE noc 444 ded ed dhebePened.s tenes desecsovuest 1
Revenue Act of 1932
IE. CL UL k'npndd Chae ce vancedpeandonstsnced sth eeenhon ]
ED cobs o cae bobancidssvewtdbavbevees céuvcdecabeebenn 4
Internal Revenue Code of 1954 (26 U.S.C.):
RIED i cakWecccdbcdeccchcsecdcceccsnccces (asewen 12
SED cca nn Gacbendcevsatenerisdbeveccccsecacedtevipen 10
cs 'oh bo dubbe don¥ewsvincessiunéabeu’ 10, 11
os. csc nb deced Abeer tepeccuteuecceual 10, 11
EE eucecccanceduethonsssteminesvecekeahesshwhune 10
cao kan pagedeepebeetanetec caeddeusedeneennl 12
ED whines «50.640 ob oud coRbSs Cadeedduesviabiousen 9, 12
SE sons ving bedvcesbdevesvatexhbe 6abscpbecttapeeenl 8
NE bs pcuvdidactctdethbanadhebidcyetevovessteubed 12
IR ks ida ca cae eGheaneaveeneonéooceansuaeebee 8
Ec DCs cok ake uview causes cucieebsievenccecnsaddpen enn 9
IE Cc ccG diocese cuddeccébescdebeddncccvovecuevnecen 12
Guctiem TRAM) oo osc ccsdcccccescccccsvccccvcccccteds 12
ED Bik i odd win pot dws dotescdvesecccowenieein 12
EE MRED oc nccceusbecceeceteseuceseucnnesens ]
RL IED ccs ocucwauusaessd coccscndeyenseeshben x
ING is ci dao cabdienedadtecccecadatvalinpeenaey 12
OD Wa din nn Cdsbedhceaccbbsdotobhesnsccaccouaes 12
Section 25.2514-3(e), Example (3) ............ ese ceeeeeseeees 12
Revenue Rulings:
Revenue Ruling 79-327, 1979-2 C.B. 342 ..... 0... ceeeeeeeees 12
Revenue Procedures:

—

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a

vil
TABLE OF AUTHORITIES (Continued)
Page
Treatises:
Merten’s Law of Federal Gift & Estate Taxation, 1959 Ed.:

Legislative History:

H. Rep. No. 708, 72nd Cong., Ist Sess. (1939-1 C.B.,

8. Rept. No. 665, 72nd Cong., ist Sess. (1939-1 C.B.,

a a ee eae
v te Ay: a -

No.

SUPREME COURT OF THE UNITED STATES
MYRA B. ROBINSON, Petitioner

versus
UNITED STATES OF AMERICA, Respondent

On Petition for Writ of Certiorari
To the United States Court of Appeals
for the Fifth Circuit

Petition for Writ of Certiorari

Official Reports in Courts Below

The official reports of this case in the courts below are
found in 75 T.C. 346 (1980) and in 675 F.2d 774 (5th
Cir., 1982).

Grounds for Invoking Jurisdiction

(a) The date of the decision of the Fifth Circuit sought to
be reviewed is May 14, 1982.

(b) The date of the order denying petitioner’s motion for
rehearing of such decision is June 10, 1982.

(c) The statutory provisions conferring jurisdiction to
grant the requested writ of certiorari are:
(1) U.S. Const. Art. 3, Sec. 2, Cl. 2
(2) 28 U.S.C. 1254(1)

“it

(3) Supreme Court Rule 17, Paragraphs 1(a) and
1(e):
(A) The decision below is in conflict with the deci-
sions in other circuits.
(B) The decision beiow is in conflict with applica-
ble decisions of this Court.

Constitutional Provisions, Statutes and
| Regulations Involved
The constitutional provisions, statutes and regulations
which the case involves, including those in support of

jurisdiction, are set out, in pertinent part, in the appen-
dix, and are cited below:

Authority Reference
U. S. Constitution Article 3, Section 2, Cl. 2 .... A-31
Supreme Court Rule 17, Paragraphs l(a) and 2(c) A-31

SE on dns, cians osensaie ehh A-32

Revenue Act of 1932
NE icin, bade o nal bWhile cave ooadebee A-32
dis cna ete thenesccoddenecede A-33

Internal Revenue Code of 1954
oho ba Beak ccvesedccted A-33
Ne a a Ce aeoubenk A-34
IED init. 1 elias owhbbas coendece’ A-35
IE ii ks OU on eee. sive shoul A-36
I in AE te, ok ois. Ceeceoninel A-38
EE RS EOS eS SEN EN py Al
a i odes cauie ade kine A-4l
ES os cle Sach cates conaewenece A-42
6d cn act etee ee use ceneceue A-42
I Ss ohink eet be ehis in on on oh ealth A-42

Treasury Regulations

Section 25.2511-1(g)(1) .......... cece eeneeees A-44

Section 25.2511-1(h) ............. seks kc bake A-45

in. on nes bacccecencess A-48

NTE bc cc ccbnvcceccecvcccess A-52

Section 25.2514-3, Example (3) ............... A-53
Statement of the Case

All evidence was stipulated. From such stipulations,
and the opinions of the courts below, the following rele-

vant facts are presented:

1. On February 27, 1972, G. R. Robinson, petitioner’s
husband, died testate and his will was admitted to pro-
bate on March 16, 1972. (Stips. 5 and 6)

2. His will gave petitioner a choice — she could elect to
let her husband’s will direct the disposition uf her share
of their community property and take fully under the will
or she could retain her right to freely dispose of her com-
munity property share and take only a specific bequest
of personal effects under the will. (75 T.C. 346, 347 and
675 F.2d 776)

3. On August 27, 1972, petitioner filed an election to
accept the will’s direction of the disposition of her com-
munity share. (75 T.C. 347 and 675 F.2d 776)

4. Pursuant to her election and her husband's will, peti-
tioner’s community property share became the corpus of
the “Myra B. Robinson Trust” (hereinafter wife’s trust)
while her husband’s interest in the community and any
separate property he may have owned which was not
specifically bequeathed were placed in the “G. R. Robin-
son Estate Trust” (hereinafter husband’s trust). The

>

4

terms of the wife’s trust provide petitioner with a right
to all the net income of that trust. for life, while under the

husband’s trust she has a right to an annual amount from
that trust equal to 4 percent of the initial corpus. Upon
petitioner’s death, the corpora of the two trusts are to be
combined and then divided into equal shares for certain
descendants of petitioner and her deceased husband. (75
T.C. 347 and 675 F.2d 776)

5. Apart from her powers as trustee (held not, to be rel-

evant here), petitioner had the following powers over the
wife’s trust:

During the life of my wife, she shall have the
power, by recordable instrument delivered to the
Trustee, to appoint any part or all of my wife’s Trust
free from such Trust to any one or more of our issue
(or to the surviving spouse of any of our then
deceased children) in such shares, manner and pro-
portions as she shall see fit. In addition, my wife
shall have the power, by recordable instrument
delivered to the Trustee or by Will, to appoint any
part or all of my wife’s Trust free from such Trust to
any one or more charities in such shares, manner
and proportions as she shall see fit. Any such power
described in this paragraph may be exercised only
in a gratuitous way and not in a way which
imposes any condition upon the recipient
thereof. * * *

Thus, petitioner could appoint any part of the wife’s trust
to designated appointees or to qualifying charities. On

March 26, 1976, petitioner executed a valid release’ of
these appointment powers. (75 T.C. 348 and 675
F.2d 776)

6. When the wife’s trust was created, its value was
$731,741.94. The husband’s trust had a value of
$483,962.01 when it was created. Petitioner was born on

‘The Fifth Circuit asked why petitioner released the power. The answer
below was given (but not as a part of the trial record) in oral argument.

I, undersigned counsel, prepared the widow's election wills of the peti-
tioner and her deceased husband. They were prepared in the light of var-
ious tax issues and planning as | understood them. Inflation was not then
a serious problem »nd we were primarily interested in securing the Section
2043 deduction. Two unexpected things occurred.

First, decedent’s husband died prematurely in a car accident. As a resu':
her “received” annui.y was of greater, and her “surrendered” remainder
was of less, value than anticipated when the wills were signed.

Second, by the time of the release inflation was beceming a factor, and
the Section 2043 offset would bo relatively less valuabie than exclusion of
the trust.

In fact, it did not dawn on any of us until well into estate administration
that petitioner had received an annuity greater than ‘er surrendered
remainder. When we realized this, the possibilities of excluding the trust
from her estate seemed apparent. However, we were not aware at any time
prior to briefing for the Tax Court case that the issue had been decided in
any litigated case.

The only reason for the relinquishment of the power was the petitioner's
long term uncertainty of how to plan her own affairs by reason of not know-
ing whether the trust would be include’ in her estate. The Service has a
policy of not ruling on estate tax matters for living persons. Rev. Proc. 72-
3, Section 3.02, 1972-1 C.B. 698. We were aware of the well established
principle that estate and gift taxes are in pari materia. We felt that the
only way to be certain about the future estate tax status of the trust (for a
relatively young widow) was to release the retained power and test the
matter by litigation under the gift tax laws.

Special efforts were made to get the gift tax returns audited. Then the
examining agent filed a report finding no gift, hence no tax. While normally
a favorable taxpayer result, we asked the district director in Dallas to seek
technical advice from the Washington office, and we were relieved when
Washington decided to propose a tax.

i

December 20, 1919. (75 T.C. 348 and 675 F.2d 777
footnote 6)*

7. The value of whatever petitioner gave up, with
respect to her property passing under the will of G. R.
Robinson, by reason of her election to take under his
will, was less than the value of what she received under
such will, with respect to her husband's property, by rea-
son of her election filed on August 22, 1972. (Stip. 15, 75
TC. 352 and 675 F.2d 777)

8. In its statutory notice of deficiency, the government
asserted a gift tax deficiency of $58,676.97 based on its
determination that, when petitioner released her special
power to appoint, she made a taxable gift of the remain-
der in the wife’s trust corpus (her community property
share). (75 T.C. 348)

Basis for Tax Court’s Jurisdiction

The basis for the jurisdiction of the Tax Court in this
case is 26 U.S.C. 7442.

Argument in Support of Writ

The Fifth Circuit recognized that this Court held in
Sanford’s Estate v. Commissioner, 308 U.S. 39 (1939)
that [citing from 675 F.2d 774 (footnote 13)):

“(tJhere is nothing in the language of the statute,
and our attention has not been directed to anything

*The disputed adjustment in interest referred to in footnote 6 at 675 F.2d
774 was $23,176.19 (as set out in footnote 2 of 75 T.C. 348). If the govern-
ment was correct in its contention thereon, it would not change the accu-
racy of the stipulation referred tc in Statement of Fact No. 7 above. The
$236,622.58 referred to at 675 F.2d 774 would simply become $225,285.80,
a value received still greater than the $196,085.72 surrendered.

7

in its legislative history to suggest that Congress
had any purpose to tax gifts before the donor had
parted with his interest in the property given,
or that the test of the completeness of the taxed gift
was to be any different from that to be applied in
determining whether the donor has retained an
interest such that it becomes subject to the estate tax
upon its extinguishment at death ... The two
[taxes] are in pari materia and must be ‘construed
together.
“Accord, Jewett v. Commissioner, U.S.
, 102 S.Ct. 1082, 71 L.Ed.2d 170 (1982);

Burnet v. Guggenheim, 288 U.S. 280, 286, 53 S.Ct.
369, 371, 77 L.Ed. 748, 751 (1933).”

(Emphasis added)

Thus, to support the Fifth Circuit’s decision, it was
essential for it to hold, and it did hold, erroneously, that
had petitioner not released such power during her life,
the wife’s trust would have been included in her estate at
her death. See 675 F.2d 779.

This holding was contrary to every other case (includ-
ing three other circuits) which had considered the ques-
tion. Estate of Davis v. Commissioner, 440 F.2d 896 (8rd
Cir., 1970); Commissioner v. Nelson, 396 F.2d 519 (2nd
Cir., 1968); Estate of Christ v. Commissioner, 480 F.2d
171 (9th Cir., 1973); Estate of Gertrude Friedman, 40
T.C. 714 (1963); and Estate of Robert Rodger Glen, 45
T.C. 323 (1966) (full court). It is also believed to be con-
trary to the philosophy of prior Fifth Circuit authority.
See Vardeli’s Estate v. Commissioner, 307 F.2d 688 (5th
Cir., 1962) and U.S. v. Gordon, 406 F.2d 332 at 341 et
seq., esp. footnote 15 (5th Cir., 1969).

The theory applicable in each of these cases, and in the
present case, is that one who provides the consideration
for a “transfer” is the “transferor” thereof. Under this
landmark principle, the power which petitioner released
in 1976 was not created by her. By election in 1972 to take
under the will, she received benefits stipulated to be of
greater value than she surrendered. She surrendered no
net value, and thus made no gift, to any one by virtue of
such election (and later release of powers). The principle
is well established that when A makes a gift to B on con-
dition that B make a gift to C, the entire gift to C (to the
extent of the transfer from A to B) is from A, not B?

"Rey. 25.2511-1(h)(2)*;, Reg. 25.2611-1(h(2); Lehman v. Commissioner, 109

F.2d 99 (2nd Cir., 1940), cert. den. 310 U.S. 637 (1940); Estate of Dora N.
Marshall, 51 T.C. 696 at 701 (1969); U.S. v. Stapf, 375 U.S. 118 (1963);

Estate of v. Commissioner, 552 F.2d 1340 (9th Cir., 1977); Seaman
v. U.S., 156 F.2d 719 (7th Cir., 1946); Estate of Martha R. Campbell, 59
T.C. 133 (last nth emganetnes leeetpmety ay i ae ert
ing, 27 T.C. 479¢ aff'd on other grounds sub nom First N. Bank

, Trustee v. Commissioner, 255 F.2d 759 (7th Cir., 1968); Augus-
41 B.T.A. oo Schultz v. U.S., 38 A.F.T.R.2d 74-199

Under the so-called “widow’s election will)’ such as the
one here, the method of determining who the donor (or
transferor) is is well established. That the term “ade-
quate and full consideration in money or money's worth”
has the same meaning in the gift tax provisions (e.g.,
Section 2512) as ii: the estate tax provisions (e.g., Sec-
tions 2036 and 2043) is clear. Merrill v. Fahs, 324 U.S.
308 (1945). It is similarly established that one put to an
election under such a widow’s election will receives “con-
sideration” within the meaning of such estate and gift tax
term; and that the estate and gift tax results are deter-
mined by reasoning that such widow gives (or transfers)
a remainder interest in her own property (passing by
such election) and receives such consideration in the
form of a life estate’ in the decedent’s net property given
therefor. Commissioner v. Siegel, 250 F.2d 339 (9th Cir.,
1957); Chase National Bank, 25 T.C. 617 (1955), rev’d on

was not an adequate and full consideration in money or money’s worth
for that which was received by B;.. .”

shall be deemed a gift. For if A selis property
worth $10,000 to B for $1,000, there is a gift of F

al

10

other grounds sub nom Commissioner v. Chase Man-
hattan Bank, 259 F.2d 231 (5th Cir., 1958); Vardell’s
Estate v. Commissioner, 307 F.2d 688 (5th Cir., 1962);
Estate of Isabelle M. Sparling, 60 T.C. 330 (1973), rev'd
on other grounds, 552 F.2d 1340 (9th Cir., 1977); Estate
of Emma Bressani, 45 T.C. 373 (1966); and Zillah Mae
Turman, 35 T.C. 1123 (1961).

Admittedly, those cases above® which petitioner
alleges are contrary to the decision below dealt with
“dominion and control” under what is now Section
2036(a)(1), whereas the power held by petitioner would
have been tested by Section 2036(a)(2).” However, it is
incredible that “dominion and control” should be excused
in Section 2036(a)(1) and not in Section 2036(a)(2) when
the former involves retention of a greater personal eco-
nomic benefit than the latter. Clearly, Section 2036(a)(2)
type powers do not preclude deductibility in income tax
cases. Winthrop v. Meisels, 281 F.2d 694 (2nd Cir., 1940)
and W. D. O’Brien, 46 T.C. 583 (1966) [this O’Brien case
being cited for estate tax purposes by Greer v. U.S., 448
F.2d 937 at 945 (4th Cir., 1971)].

The aggregation of both Section 2036(a)(1) and
2036(a)(2) type powers is no different from having a sin-
gle such power. The general principle of aggregation of
powers being different from the separate powers them-

*Esiate of Davia v. Commissioner, 440 F.2d 896 (3rd Cir., 1970); Commis-
sioner v. Nelson, 396 F.2d 519 (2nd Cir., 1968), Estate of Christ v. Com-
missioner, 480 F.2d 171 (9th Cir., 1973), Estate of Gertrude Friedman, 40
T.C. 714 (1968) and & state of Robert Rodger Glen, 45 T.C. 323 (1966).
"Clearly, petitioner did not have the power to alter, amend or revoke under
Section 2088 as suggested by the Fifth Circuit at 675 F.2d 773 and 774, foot-
note 12. Such a power would clearly have destroyed the measurability
referred to at 675 F.2d 781, footnote 20. Burnet v. Guggenheim, 288 U.S.
280 (1988), cited at 675 F.2d 77%, involved such a power to revoke.

ll

selves was rejected under Section £036(a)(2) in Old
Colony Trust Co. v. U.S., 423 F.2d 601 at 603 (1st Cir.,
1970) (effectively overruling a prior contrary decision in
such circuit), and in U.S. v. Byrum, 408 U.S. 125 (1972),
esp. footnote 6. [The Court should not be misled by the
holding in Old Colony that a separate power to designate
beneficiaries nevertheless caused includability under
Section 2036(c)(2). The result in such case would have
been the same had a life estate been retained, under Sec-
tion 2036(a)(1).)

So strong was the fascination of both lower courts with
petitioner’s “retention” of powers that they lost sight of
the overriding, underlying purpose of the retention (i.e.,
dominion and control) provisions. They are designed to
keep one who makes an estate-depleting “transfer” from
enjoying a tax reduction therefrom if he has retained
economic control over the gift. A “transfer” by the tax-
payer is essential to taxation. (See footnote 3, especially
following first paragraph.) The authorities overwhelm-
ingly establish that the retention provisions have no
application when there was no estate-depleting “trans-
fer” By stipulation in this case, there was none. The fol-
lowing examples are illustrative:

Situation 1— A gives $10 to B on condition that B
put $9 in a trust for A’s children, C and D, from
which trust B “retains,” hn. aaa
appoint such trust as between C and

Situation 2— Paras nae
put $9 in a truat for A’s children, C and D, from
which trust B “retains;’ by agreement, a life
estate.

In neither case has B done anything to deplete her
estate, though literally she has “retained” dominion and
control over the trust property. The situation is identical

12

in substance and result if B is eliminated from the trans-
actional part, and A simply creates a trust for C and D
giving B either a special power to appoint or a life estate,
or both.

Since petitioner is not the one who created wife’s trust,
for the reasons above set out, no gift can be predicated
upon the provisions of Reg. 25.2511-2, as was done by the
Fifth Circuit at 674 F.2d 777, footnote 5. By its terms it
applies only to a “donor;’ or one who has made a “trans-
fer.” See also the last sentence of Reg. 25.2511-1(g)(1);
and Reg. 25.2511-1(h) and Reg. #5.2512-8. By failing to
recognize this, the lower courts are prospectively impos- —
ing a double transfer tax upon petitioner contrary to the
philosophy of the clear policy implemented by the “full
and adequate” consideration provisions of Sections 2035-
2038, and by Section 2043.

For reasons cited in the courts below? no gift tax can

be predicated upon petitioner’s release of power if such
power is deemed created by her husband.

*As to such a special and non-general power, there is no property interest
other than the right to third party recipients. See Estate of Stein-
man v. Commissioner, 69 T.C. 804 at 809 (1978) and Estate of Emma Bres-
sani, 45 T.C. 373 at 379 (1966). Congress has clearly excluded such powers
from taxability since they fail to as general powers of appointment
under Section 2514 (or Section 2041). U.S. v. Field, 255 U.S. 257 (1921) and

13

Summary

For the reasons, and based upon the authorities, set
out above petitioner respectively seeks certiorari.

Appendix

An appendix, as required by Rule 21(k), is set out
herein immediately following signature of counsel and
certificate of service. The opinions below are set out

therein (at A-1 and A-17)@riginall SigpeidiBiyna! provi-
sions, statutes and regulations required by Rule 21(f).

Respectfully su n Be
EE A

EDWARD R. SMITH

OF COUNSEL:

SMITH, BAKER, FIELD
& CLIFFORD, INC.

2112 Indiana Avenue
Lubbock, Texas 79410

806-792-0800

Attorneys for Petitioner
Myra B. Robinson

14

CERTIFICATE OF SERVICE
It is hereby certified that service of this Petition for
Writ of been made ~ oT | pbc
thereof on this day of ;
1982, in an envelope with postage prepaid, properly
addressed to the following parties:

=A DP

EDWARD R. SMITH

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385009_0725%3A1. Public record. Not legal advice.