Is Chief Counsel Resurrecting the Chapter 14 'Monster'?
9 Pages Posted: 28 Jan 2015
Date Written: December 15, 2014
This article critically reviews the analysis of the office of the IRS Chief Counsel in its recent CCA #201442053. The CCA deals with the restructuring of a profits interest that clearly resulted in at least one gift under the gift tax rules of Chapter 12, Rather than address those ordinary gift tax rules, the CCA attempts to apply Section 2701, which is part of Chapter 14, to value the gift. Its analysis fails completely. Because the facts included the creation of a profits interest, the author is concerned that more may be made of this CCA than justified. The author believes that the CCA ignores the important differences in the proposed and final regulations under Section 2701, which he considers to be extraordinary work by the writers of those regulations. The author requests that the Chief Counsel withdraw the CCA to honor the earlier work on Treasury and the IRS.
Keywords: GIft tax, Internal Revenue Code Section 2701, profits interests, CCA#201442053, Chapter 14
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