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:


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.


Tax Court Litigation Attorneys

Need assistance litigating in the U.S. Tax Court? Freeman Law’s tax attorneys are experienced litigators with trial-tested litigation skills and in-depth substantive tax knowledge, having collectively litigated hundreds of cases before the U.S. Tax Court. Our tax controversy lawyers have extensive experience in Tax Court matters involving partnership audits and litigation under both the TEFRA and BBA regimes, international tax penalties, foreign trusts, valuation, reasonable compensation disputes, unreported income, fraud penalties, other tax penalties, any many other matters. We draw on our experience and wealth of tax knowledge to advise and guide clients through the entire tax controversy process, building the right strategy to resolve tax controversies from day one. Schedule a consultation or call (214) 984-3000 to discuss your Tax Court concerns or questions.