Dieringer v. Commissioner, No. 16-72640 (9th Cir. 2019)
Annotate this CaseThe Ninth Circuit affirmed the tax court's decision to sustain a deficiency against an estate for overstating the amount of a charitable deduction and to sustain an accuracy-related penalty. In Ahmanson Foundation v. United States, 674 F.2d 761, 772 (9th Cir. 1981), the panel underscored the principle that the testator may only be allowed a deduction for estate tax purposes for what was actually received by the charity. Applying Ahmanson, the panel held that the tax court correctly considered the difference between the deduction and the property actually received by the charity due to the executor's manipulation of the redemption appraisal value. The panel also found nothing in the record that suggested that the tax court's findings were clearly erroneous. Finally, there was no error in the tax court's holding that the commissioner properly imposed the accuracy-related penalty under I.R.C. 6662(a).
Court Description: Tax The panel affirmed the Tax Court’s decision sustaining a deficiency against an estate for overstating the amount of a charitable deduction, and sustaining an accuracy-related penalty. Petitioner, the estate executor and heir of the decedent, declared a large charitable deduction based on the value of certain estate property at the time of death. The charity received less than the amount of the claimed deduction, and the estate received a tax windfall in the process. Petitioner contended that the Tax Court should have taken into account events that occurred after the decedent’s death in determining the value of the charitable deduction. In light of this court’s holding in Ahmanson Foundation v. United States, which underscored “the principle that the testator may only be allowed a deduction for estate tax purposes for what is actually received by the charity,” 674 F.2d 761, 772 (9th Cir. 1981), the panel affirmed the Tax Court’s decision upholding the reduction of the charitable deduction and the deficiency assessment. The panel found no clear error in the Tax Court’s finding that there was no evidence of a significant decline in the economy that would have decreased the value of the property being donated. The panel also found no error in the Tax Court’s upholding of the accuracy-related penalty.
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