Article: IRS Argues Split-Dollar Is Not ‘Faire,’ but Challenge Is Foiled

Justin Miller (Evercore Wealth Management; Golden Gate University Law School) and Alexander Lyden-Horn (Evercore Partners Inc) recently published an article entitled, IRS Argues Split-Dollar Is Not ‘Faire,’ but Challenge Is Foiled, Property & Probate, 2022. Provided below is the abstract to the article:

In Estate of Levine v. Commissioner, 158 T.C. No. 2 (2022), the estate successfully parried an IRS challenge to the valuation of the decedent’s right to repayment of premiums under a split-dollar life insurance arrangement. The IRS argued that the value of such right should be equal to the cash surrender values of the life insurance policies—and their weapons of choice were sections 2036, 2038, and 2703. In an opinion full of dual—or one could argue “duel”—meanings, the court ultimately rebuffed the IRS’s valuation challenges because (1) the decedent retained no power to terminate the policies and (2) the person with the power to do so was constrained by fiduciary obligations.

https://lawprofessors.typepad.com/trusts_estates_prof/2022/10/article-irs-argues-split-dollar-is-not-faire-but-challenge-is-foiled.html