Estate of Jorgensen v. Commissioner of Internal Revenue, 050411 FED9, 09-73250

• Party Name: ESTATE OF ERMA V. JORGENSEN, Deceased; JERRY LOU DAVIS, Executrix and Co-Trustee; GERALD R. JORGENSEN, Co-Trustee, Petitioners, v. COMMISSIONER OF INTERNAL REVENUE, Respondent. v.
• Judge Panel: Before: REINHARDT, HAWKINS, and GOULD, Circuit Judges.
• Case Date: May 04, 2011
• Court: United States Courts of Appeals, U.S. Court of Appeals — Ninth Circuit

ESTATE OF ERMA V. JORGENSEN, Deceased; JERRY LOU DAVIS, Executrix and Co-Trustee; GERALD R. JORGENSEN, Co-Trustee, Petitioners,

v.

COMMISSIONER OF INTERNAL REVENUE, Respondent.

No. 09-73250

United States Court of Appeals, Ninth Circuit

May 4, 2011

NOT FOR PUBLICATION

Argued and Submitted April 13, 2011 Pasadena, California

Appeal from a Decision of the United States Tax Court Harry A. Haines, Tax Court Judge, Presiding Tax Ct. No. 21936-06

Before: REINHARDT, HAWKINS, and GOULD, Circuit Judges.

MEMORANDUM ^[*]

The Estate of Erma V. Jorgensen (the "Estate") appeals the tax court's affirmance of the Commissioner of the Internal Revenue's ("Commissioner") assessment of an estate tax deficiency. Concluding that certain transfers decedent had made to two family limited partnerships should remain included in the estate valuation, the tax court found that decedent had retained the economic benefits and control of such property and that the transfers did not involve a bona fide sale for full consideration. See 26 U.S.C. § 2036(a). We review these determinations for clear error, Estate of Bigelow v. Comm'r, 503 F.3d 955, 964, 970 n.6 (9th Cir. 2007), and affirm.

On appeal, the Estate does not contest the tax court's determination that § 2036(a) applies; that is, it acknowledges decedent retained some benefits in the transferred property (because she had written checks on partnership accounts to pay some personal expenses and make some family gifts), but argues that these amounts should be considered de minimis or that the application of the section should be limited to the actual amount accessed by decedent. These arguments are made for the first time to this court and run contrary to stipulations made by the Estate below.

In any event, these arguments are also without merit. We do not find it de minimis that decedent personally wrote over $90, 000 in checks on the accounts post- transfer, ¹ and the partnerships paid over $200, 000 of her personal estate taxes from partnership funds. See Strangi v. Comm'r, 417 F.3d 468, 477 (5th Cir. 2005) (post-death payment of funeral expenses and debts from partnership funds indicative of implicit agreement that transferor would retain enjoyment of property); see also Bigelow, 503 F.3d at 966 (noting payment of funeral expenses by partnership as supporting reasonable inference decedent had implied agreement she could access funds as needed).

Nor did the tax court clearly err by...