At the beginning of this year, the IRS sent a Notice of Deficiency to Sumner Redstone, assessing a deficiency of $737,625 with penalties for failure to file a gift tax return, fraud, and negligence (in the alternate to fraud) for the tax year of 1972.  Mr. Redstone filed a Petition with the United States Tax Court disputing the assessment and all penalties.

As a result of a settlement agreement surrounding the ownership of stock in National Amusements, Inc. (“NAI”), trusts were established for the children of Sumner Redstone and for the children of his brother, Edward Redstone.  At some time prior to the settlement agreement, Sumner and Edward were issued shares of stock in NAI.  However, a dispute arose as to whether some of the shares were held subject to an oral trust for the benefit of Sumer’s and Edward’s children.  The parties agreed that some of the shares were issued to Sumner and Edward individually and some as trustees of oral trusts for their children.  Simultaneously with the settlement agreement, a separate trust was established for each child of Sumner and Edward to hold his or her interest in NAI.  The parties cancelled the old stock certificates and issued new ones to reflect the settlement agreement and new trusts.

Forty-one years later, the IRS now contends that the transfers of NAI stock to the trusts for Sumner’s children were gifts by Sumner.  As no return was filed, the limitations period remains open under the statute.  Mr. Redstone states that he filed 33 gift tax returns to date and that no return was filed for 1972 under the advice of a tax professional that no gifts were made in that year.  Mr. Redstone maintains that position.  In addition, the Petition presents interesting arguments of estoppel, laches, and statute of limitations since, in the intervening years, many of the documents have been discarded or destroyed and many relevant witnesses are now dead.

Taxpayers and professionals should watch this case with interest.  Not only does it present an interesting case involving oral trusts, but it provides an opportunity for the Tax Court to opine on exactly how long an open limitations period can run.  Stay tuned.

Program Overview:

Income tax planning often is secondary to estate and gift tax considerations in planning involving trusts and estates.  However, the importance of income tax planning should not be underestimated because even the slightest mistake can be just as costly.  This presentation will address a variety of income tax issues that affect trusts, estates and beneficiaries, including planning with grantor and non-grantor trusts, ownership of S Corporation stock by estates and trusts, charitable income tax planning through the use of trusts, and the application of the Net Investment Income surtax (the “3.8% Medicare Tax”) to trusts and estates.  We will also discuss techniques to minimize income tax and pitfalls to avoid in trust and estate administrations.

Wednesday, June 5, 2013

11:30 a.m. – 12:00 p.m.
Registration & Lunch

12:00 p.m. – 1:15 p.m.
Program

NEW!  Location:
Winter Park Civic Center
1050 West Morse Blvd.,
Winter Park, FL  32789

Parking is complimentary.

Kindly RSVP:
By June 3rd to
estateplanning@deanmead.com
or by phone: (407) 428-5195

The program will feature three speakers from Dean Mead:

Michael D. Minton is a Shareholder in the Fort Pierce office. He is the past president of Dean Mead, and he serves as the firm’s Chair of the Agribusiness Industry Team. He represents family businesses with an emphasis on generationally-owned agricultural businesses. Mr. Minton assists with their organizational structure, federal income, estate and gift tax planning and business succession planning. He offers his clients extensive experience focusing on tax issues related to agri-business, as well as water resource issues and new innovative uses of land for value added propositions. Mr. Minton’s clients receive the benefit of his 30+ years of experience in Florida agri-business and interaction with agencies that regulate the utilization and optimization of their assets and business opportunities.

Bradley R. Gould is a Shareholder in the Fort Pierce office. He practices in the area of federal income, estate, and gift tax law and business succession planning. He represents businesses and business owners in all types of business and tax matters, including choice of entity, mergers and acquisitions, reorganizations, and other general business matters. Mr. Gould represents individuals, businesses and fiduciaries before the Internal Revenue Service and counsels clients on estate and wealth preservation planning matters. Additionally, he represents trustees, personal representatives and family members in controversies regarding wills, trusts and estates. Mr. Gould is a Certified Public Accountant.

Dana M. Apfelbaum is an Associate in the Fort Pierce Office. She practices in the areas of federal income, estate, and gift tax law and family business succession planning. She counsels individuals in estate planning, with an emphasis on implementing the client’s objectives, asset protection and minimizing wealth transfer taxes. Ms. Apfelbaum also represents fiduciaries through all stages of probate, estate and trust administration. In addition, she represents businesses and business owners in all types of business and tax matters, including choice of entity, mergers and acquisitions, reorganizations, other general business matters, and succession planning.

Date:   Thursday, May 16, 2013

Registration:   11:45 a.m. – 12:00 p.m.

Program & Lunch:   12:00 p.m. – 1:00 p.m.

Location:  Old Historic City Hall

315 Avenue A,  Fort Pierce, Florida  34950

Kindly RSVP by May 9th to  reply@deanmead.com or by phone: (772) 464-7700

As with long-established air quality credit trading, water quality credit trading allows those who can remove pollutants (here, most likely to be the nutrients, nitrogen and phosphorus) more efficiently, to exceed minimum standards and sell credits to entities for whom marginal gains in water quality can be expensive.  An example would be an agricultural landowner diverting water through wetlands to remove nutrients more cost-efficiently than a municipal utility could remove the same nutrients through technology.  The bill does not exempt anyone from meeting technology standards or from maintaining best management practices.  However, BMAPs allocate the total permissible amount of pollutants among the various interests with a watershed, and credit trading allows for those who meet legal pollution standards, but exceed their allocated “load” according to the watershed plan, to pay others to lower their discharges instead.

A copy of HB 713 is attached here:  HB 713 ER water quality credits  

Dean Mead’s Agribusiness Industry team will continue to monitor developments relating to water quality credit trading.  If you have questions, please contact Dennis Corrick at Dean Mead’s Fort Pierce office at DCorrick@deanmead.com.

Charlie Egerton and Chris D’Amico were featured presenters at the All Florida Ag Show on April 24th at the Highlands Today Center in Sebring. They provided a presentation titled, “Impact Of Affordable Care Act On Agriculture: What You Need To Know”.  Nearly 1,000 people attended the convention from all over the state of Florida.  A copy of their presentation highlights is included here:  All Florida Ag Show.