The Tax Court in Brief May 24 – May 28, 2021

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The Tax Court in Brief May 24 – May 28, 2021

Freeman Law’s “The Tax Court in Brief” covers every substantive Tax Court opinion, providing a weekly brief of its decisions in clear, concise prose.

For a link to our podcast covering the Tax Court in Brief, download here or check out other episodes of The Freeman Law Project.

Tax Litigations: The Week of May 24 – May 28, 2021


Tax Court Case: Estate of Grossman v. Comm’r, T.C. Memo. 2021-65

May 27, 2021 | Toro, J. | Dkt. No. 9892-18

Tax Dispute Short Summary

This fact pattern travels the world to reach its conclusion in the U.S. Tax Court.  The estate of a decedent (“H”) petitioned the Tax Court after the Internal Revenue Service challenged the authenticity of the H’s widow as the “surviving spouse.”  H married three times.  H and his first wife (W1), both Jewish and New York residents, married in New York and had two children.  After a decade of marriage, the couple separated.  Soon after, H began a new relationship with a woman (W2), who was not Jewish.  H traveled to Mexico to obtain a unilateral divorce from W1.

Upon returning to the U.S. with a divorce under the laws of Mexico, H and W2 participated in a civil marriage ceremony in New Jersey and had two children.  Several years later, H and W2 ended their relationship. W1 filed suit against H and W2 seeking to null and void the Mexican divorce.  W1 succeeded, with the Court finding that H’s and W1’s marriage was not legally dissolved by a Court of competent jurisdiction and thus, nullifying and voiding the marriage between H and W2.

After more than a decade, H became engaged to W3, who was Jewish.  Before their marriage, H and W1 obtained a religious divorce under rabbinical law.  H and W3, also, traveled to Israel and obtained an “allowance” to marry. Subsequently, the couple married in Israel in a traditional Orthodox Jewish religious ceremony.  H and W3 returned to New York, where they lived for nearly three decades and had two children.  The couple remained married until H’s death.  W3 took a marital deduction under section 2056(a).  The Internal Revenue Service denied the deduction, claiming that W1 was the proper “surviving spouse” under New York law.

Tax Litigation Key Issues:

Primary Holdings

Key Points of Law:

Tax Litigation Insight

Although the Tax Court’s decision provides limited application based on the facts, the overall theme – check the state’s laws and interpretations – reminds tax practitioners and the IRS to check the state law and its state interpretation.  The application of the Code to spouse-related issues begins at the state level with an understanding whether a state recognizes a particular arrangement of marriage or divorce.


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