How to Avoid Costly Mistakes in Charitable Planning, Estate Planning Journal, Feb 2003

Estate Planning Journal (WG&L)

 

 

CHARITABLE PLANNING

How to Avoid Costly Mistakes in Charitable Planning

There are a number of pitfalls to avoid when advising clients about charitable planning. Practitioners should disclose all ramifications of any contemplated charitable plan and should be sure the plan serves the clients' best interests.

Author: VAUGHN W. HENRY, CONSULTANT, AND JOHNI HAYS, ATTORNEY

VAUGHN W. HENRY is an independent advisor to charitable organizations on planned giving, and provides training and consulting services on charitable planning. His consulting firm, Henry & Associates in Springfield, Illinois, specializes in gift and estate planning services, wealth conservation, and domestic and international financial services. JOHNI HAYS is an attorney and Executive Director of the Greater Des Moines Community Foundation in Des Moines, Iowa. She is also a CLU and a member of the Iowa and Florida Bars. Ms. Hays is a co-author of the book The Tools and Techniques of Charitable Giving, published by The National Underwriter Company and is the charitable giving commentator for Steve Leimberg's electronic newsletter service, Leimberg Information Services, Inc. (http://www.leimbergservices.com). The authors have written and lectured extensively. Copyright © 2002, Vaughn W. Henry and Johni Hays.

This article highlights specific areas of charitable planning where mistakes seem to re-occur, based on the authors' experiences as charitable planning consultants. By discussing real-life mistakes to be avoided, our goal is to share practical experience and knowledge.

1.Not putting the donor's interests ahead of all others

As planners work together in a team to recommend a charitable plan for clients, it is imperative to always place the client's interests ahead of the charity, the attorney, the CPA, and the life insurance agent. It seems like a statement of the obvious. But sometimes a plan can seem so good, the planner doesn't want to throw water on the proposal by mentioning the possible disadvantages. The planners in the following case went a step farther down the wrong path by intentionally omitting relevant information the donors needed to make an informed decision.

In Martin v. Ohio State University Foundation, 1 the donors of a NIMCRUT (net income with make-up charitable remainder unitrust) sued their life insurance agent, the life insurance company, and the charity that also acted as trustee of their NIMCRUT. In this case, an attorney and an insurance agent had recommended to a couple a charitable plan that included the donation of $1.3 million of undeveloped farmland to a NIMCRUT. The donors would use income from the NIMCRUT to purchase a $1 million life insurance policy, costing $40,000 per year, for wealth replacement for the donor's children.

The donors received several proposals over a few months. Each proposal showed the NIMCRUT paying the donors income immediately after the execution of the NIMCRUT. Because the donor's annual income prior to the transaction was only $24,000, the donor was counting on the trust income to pay the insurance premiums.

The charity's representative wrote a comment on the last proposal shown to the donors that a net income trust funded with non-income-producing land can't make any income payments until after the land is sold. When the insurance agent saw the comment on the proposal, he deleted it before giving it to the donors. Unfortunately, the land was not sold until two and one-half years later, and no income was paid to the donors during that time. In the meantime, the agent tried to loan the clients enough money to pay the insurance premiums. But eventually, the policy lapsed. The donors sued for fraud, negligent misrepresentation, breach of contract, and breach of fiduciary duty on the ground that they had never been told the truth about income not being payable from the NIMCRUT until after the land was sold.

In Martin, the advisors failed to give the donors accurate and complete information as to how the charitable gift would work in their situation. The advisors intentionally deceived the clients for what appears to be their own financial gain. At all times and in all aspects of planning with clients, the goal must be to provide advice that is in the clients' best interests. Clients deserve objective, comprehensive, and accurate advice from their planners even if it prevents the charitable gift from occurring.

2.Recommending a charitable gift without a full understanding of the donor's financial needs and goals

Sometimes, planners recommend a charitable gift as if it were a financial product. But a charitable gift is not a product; it must be analyzed as part of an integrated estate and charitable plan. For example, one planner wanted to set up a CRAT (charitable remainder annuity trust), funded with farmland, for an older client. The planner had a fixed annuity he wanted to sell to the trustee who would pay for it using the proceeds from the land. The planner was under the impression that the trust was required to purchase a commercial annuity because it was a charitable remainder "annuity" trust. The planner was then advised that a well-balanced mutual fund might be a more suitable investment for the proceeds. The planner responded he wasn't licensed to sell mutual funds.

Upon learning that the annuity would produce "tier one" ordinary income at the client's marginal income tax bracket of 42%, the planner replied that because his client would be obtaining a large income tax deduction, the client could afford to pay more in income taxes. 2

Sadly, in this situation, the product-selling planner wasn't mindful of the drawbacks of recommending a CRT (charitable remainder trust). The planner did not ascertain his client's charitable interests. Instead, he suggested the CRT as a means to avoid or even evade capital gains taxes when, in fact, the strategy would potentially increase his client's tax liability. The recommendations made for this plan weren't in the client's best interests and could be considered malpractice on the part of the planner.

3.Serving as trustee

Another misstep can occur when the advisor serves as the trustee for either the client's life insurance trust or charitable trust. Financial planners, brokers, and insurance agents must be extremely cautious when asked by their clients to serve as trustee. The best answer to give a client is: "No, thank you." Serving as trustee can create a serious conflict of interest if the trustee benefits in any way though any transaction with a charitable entity, not to mention SEC problems if the agent or broker has a securities license.

If an insurance agent is selling a policy to the trustee when he also serves as trustee, he is selling a product to himself for which he earns a commission using someone else's money. The result is a conflict of interest; it's best to leave the trustee's duties to a trust professional.

Generally, non-legal advisors are not well-trained in the duties imposed on the trustee as a fiduciary. Moreover, non-legal advisors are typically unfamiliar with the language used in trust documents as well as the implications of a trust's provisions. Most insurance companies will not allow their agents to act as trustees for trusts funded with the insurer's own insurance policies. Additionally, most E&O (errors and omissions) liability coverage does not include acts by an insurance agent serving as a trustee.

Even attorneys are reluctant to be trustees because attorneys know all too well the complex duties involved when acting as a fiduciary and following the prudent investor rules. One trust officer, who found out too late what the trustee's duties are, served as the trustee of a testamentary CRAT. He asked how long he could wait to begin making payments to the income beneficiaries because the land held by the CRAT hadn't been sold and there were no other assets in the trust. Three years later, the income beneficiaries still hadn't received their first income payment from a trust that has no legal recourse but to distribute income or assets annually, whether or not those assets are liquid.

4.Donating inappropriate assets

Another difficulty arises when a charitable planner is not familiar with the consequences of making gifts using various types of assets. The tax rules governing charitable deductions for different kinds of assets can be complex, so the best way to prevent these mistakes is to know the rules for each type of asset. Exhibit 1 lists assets that either should be given with caution or should not be given at all.

For instance, one planner suggested that a client donate art worth $3 million to a CRUT that required a 10% income payment. Even though the client properly executed the CRUT, the client continued to display the artwork in his home. The planner mistakenly thought the charity would advance the 10% income payment to the trust each year. The planner did not know the artwork couldn't be kept indefinitely on display at the client's home. 3 Furthermore, the charitable deduction in this situation was not based on the artwork's fair market value (FMV) (although the planner had told the donor his deduction would be based on FMV). Instead, the deduction for tangible personal property that has no "related use" to the CRUT was based on the donor's much lower cost basis. 4

Another planner was working with a client whose only assets were $75,000 of mutual funds and a $350,000 IRA. The planner didn't realize that the entire IRA would be subject to income taxes and possible penalty taxes if the client donated it to a charity in exchange for a charitable gift annuity. 5 Adding to the misunderstanding was the offending charity's IRA donation "proposal," which failed to adequately disclose the disadvantages of using an IRA for an inter vivos charitable gift under current tax laws. (The proposed Charity Aid, Recovery and Empowerment Act of 2002 (the "CARE" bill), 6 if enacted into law, may allow IRAs to be given to charities during the donor's lifetime without causing a taxable event.)

A financial planner, who also wasn't aware of the consequences of donating the specific asset he recommended, knew his client would soon receive a large sum of money from the sale of a business. The planner recommended that his client quickly donate the business to a CRT to help his client avoid taxes. Later, the planner discovered the client had actually sold his entire business five years ago, and this large sum of money was the final payment in a series of installment payments for the buyout.

5.Reinvesting CRT assets improperly

Frequently, a charitable trust is set up by a financial advisor or insurance agent with the expectation that the donor, who often serves as trustee, will look to the advisor or agent to reinvest the proceeds of the donated asset once it's sold. While there is nothing wrong with this, advisors must be aware of the complexities associated with the Prudent Investor Rule, charitable trust accounting, tax deductions, and other charitable rules in order to comprehend fully the consequences of their recommendations.

An example of improperly invested CRT assets occurred when a planner proposed that his middle-aged donor establish a CRAT. Inside the CRAT, the donor-trustee bought a "life-only" single premium immediate annuity to "guarantee" the annuity income payable to the income beneficiary. The flaw in this transaction is that the charity would be left without any assets when the trust terminates, because a single premium immediate annuity for "life only" ends upon the death of the client, with no principal balance left over. The planner's recommendation would make the trust subject to oversight by the state's Attorney General for imprudent investment, and all the client's advisors are potentially liable to the charity. The planner didn't realize that a CRT is a split-interest gift, and there are two beneficiary groups with a legal interest in the trust. Hence, the trustee must wear two hats—one for the income beneficiary and one for the charity.

To compound an already unpleasant situation, when the planner was told about the flaw in his proposal, he and the lawyer argued that the trustee's purchase of the annuity was valid because the trust "passed the 10% test." 7 They didn't understand the difference between the 10% test in terms of obtaining a charitable deduction and the subsequent problems inherent in investing CRT assets improperly.

Another planner, who also recommended a similar plan, suggested that the trustee purchase a life insurance policy to pay the charity its portion when the immediate annuity payments end. However, this plan was similarly destined for failure, because a CRAT cannot accept ongoing contributions to pay a lifetime of insurance premiums. 8

Improper investing occurred when a stockbroker chose to invest his client's CRT funds in several partnerships, producing unrelated business taxable income (UBTI) in the first year of the CRT's existence. The presence of UBTI created a taxable CRT that did not avoid capital gains tax when the appreciated asset that funded the CRT was sold. 9 In addition, there was no income tax deduction to offset the reinvestment error, compounding the harm from the broker's poor advice.

In Bartels' Trust, 10 the Bartels established a supporting organization for the University of New Haven. The Bartels, as trustees, invested in securities using funds borrowed from their stockbroker. The court found the income derived from securities purchased on margin was UBTI.

Other mishaps have occurred when the trustees were given access to a charge card on a money market account held inside a CRT. When trustees have charge cards on CRT assets, the outcome can be self-dealing and debt-financed problems similar to trading on margin accounts and charging the CRT interest on the loan when the trades do not materialize as expected.

If a planner recommends ("sells") a CRT as a way to take assets under management or to sell wealth replacement, it isn't unethical but it can be shortsighted. It's also likely to result in unhappy clients who find themselves stuck with an irrevocable plan that doesn't meet their needs. Agents and planners who recommend charitable gifts must be knowledgeable about charitable gift laws and be prepared to assemble a team of experts to implement a plan that serves the donor's best interests.

Learn from the mistake of an insurance company that allowed a commercial deferred annuity to be removed from inside a CRT. The CRT's trustee was the owner and beneficiary of the annuity, and her husband was the annuitant. At the husband's death, the death claim form was sent to the surviving spouse, who checked the box on the claim form allowing the surviving spouse to change the ownership of the annuity to her own name as an individual. She then withdrew all the interest earnings in the annuity. The error wasn't discovered until the spouse complained about the large amount on the IRS Form 1099 that she received the following January for the interest income she had gotten. This is a problem with NIMCRUTs that use a deferred annuity when the insurance company incorrectly sends a Form 1099 to the annuitant, instead of to the tax-exempt CRT, while the CRT properly issues a K-1 for the same income distributions, thus doubling the income tax exposure.

The four-tiered system of accounting in a CRT is complex. 11 When planners do not fully comprehend all the issues involved, mistakes can be made. For instance, one attorney advised his client to fund a CRT with farmland. The attorney recommended that the trustee purchase tax-free municipal bonds after the land was sold in order to obtain tax-free income from the CRT. What the professional didn't realize, though, is that the capital gain income from the sale of the real estate is higher on the four-tier accounting system than any new tax-free income generated by the municipal bonds. Understandably, the client was quite unhappy when the income wasn't "tax-free."

Professional trustees can get into trouble, too. In In re Estate of Rowe, 12 the trustee of a CLT (charitable lead trust) was replaced via a court order for failing to diversify IBM stock. In 1989, the decedent in Rowe had established an 8% CLT, funded with 30,000 shares of IBM stock worth approximately $3.5 million. Eight years later, the trust still owned 20,000 IBM shares, now worth $1.9 million. The court noted that the bank failed to follow its own policy manual of diversification, and ordered the bank to refund its commissions and pay damages totaling $630,000. The court found that the bank was negligent and had acted imprudently in failing to diversify the trust's assets immediately upon receipt of the stock.

6.Not monitoring the wealth replacement sale

A charitable planning strategy can be effectively implemented with the appropriate professionals, including the client's attorney, CPA, planned giving officer, and life insurance agent. However, in charitable plans where life insurance is a part of the overall plan, the purchase of life insurance inside an irrevocable life insurance trust (ILIT) should be monitored by the donor's estate planning attorney. Attorneys should direct the process and clearly indicate to the donor, the trustee, and the insurance agent how the process should work and in what order each step should occur. Otherwise, the insurance sale can be handled in a way that undermines the donor's estate plan. The following life insurance missteps can cost clients hundreds of thousands of dollars in estate or gift taxes.

The insurance policy is issued before the life insurance trust is established. In this situation, the insurance company issues the policy before the irrevocable trust is executed and funded. If the policy is applied for before the trust is executed, the application commonly names the insured as the policyowner. If the policy is issued with the insured as the owner, and the ownership is thereafter transferred to the irrevocable trust, Section 2035 causes the policy proceeds to be included in insured's estate if he or she dies within three years of the transfer.

The preferred practice is to have the donor's insurability determined using "trial" applications. But once insurability is approved, the policy should not be issued until the ILIT is executed and funded, and Crummey withdrawal power letters have been sent to trust beneficiaries and the Crummey powers lapse. 13 At that point, the insurance agent submits a completely new application naming the trustee as the owner and beneficiary. The trustee then pays the premium to the agent, and the policy is officially issued.

The insurance agent accepts the premiums directly from the insured and applies those premiums to the policy owned by the ILIT. The proper procedure requires that the agent obtain the premium check from the trustee's funds, not from the insured's personal funds, when the trust beneficiaries have withdrawal powers. The goal is to have the trust funded, the withdrawal beneficiaries notified, and the beneficiaries' rights to those annual exclusion gifts lapse before the trustee pays the premium.

If, on the other hand, the agent obtains a premium check directly from the donor's personal funds, the premium amount is not considered a gift of a present interest because the trustee never had the funds, nor have the beneficiaries been notified of their withdrawal rights. 14 Therefore, their gifts cannot qualify for the gift tax annual exclusion. The insured must file a gift tax return for these gifts and use part of his applicable exclusion amount (currently $1 million) to cover the premiums. 15

7.Selling the numbers on a charitable illustration

The various illustrations prepared by charitable planning software are generally given to prospective donors to describe—via diagrams or flowcharts—the type of charitable gift being proposed. The mistakes made when presenting these illustrations arise from a misunderstanding of the variables behind the illustration. For example, a common mistake is to create a CRT with the donor, spouse, and child as income beneficiaries, but the illustrations may fail to mention the loss of the marital deduction and the effect of taxable gifts with a CRT being included in the grantor's estate. The software produces the correct "income tax deduction," but does not address the more complex gift or estate tax issues.

The charitable planner must know the variables that produced these calculations and numbers. The planner must understand the footnotes and assumptions behind every proposal. In the case of a CRT, for example, the planner needs to know what interest rate is being used to assume the future growth of the CRT assets. In addition, the interest rate must be a reasonable number. In turn, the planner must inform the client of the variables used in the illustration. The client must know what numbers he can rely on and those he cannot. The more the client knows and understands, the better informed and happier the client will be.

8.Selling charitable gift annuities

Planners new to the field of charitable giving may have a misconception about a charitable gift annuity. Because planners may sell commercial annuities to clients for commissions, they sometimes assume that a charitable gift annuity is an annuity offered for sale to the public from their insurance company.

However, a charitable gift annuity is not a commercial annuity offered by a life insurance company. It can be offered only by a charity and is an agreement between a donor and a charity in which the donor gives an asset in exchange for lifetime income. The income provided to the donor from the charitable gift annuity is always paid by the charity.

An example of this misconception involves a young planner who was asked to work with a particular charity's donors to conduct seminars and help establish charitable gift annuities. The planner thought the insurance company had an annuity for him to sell at the seminar and that he would be earning a commission on each charitable gift annuity "sold."

To make the confusion worse, a few charities are under scrutiny for paying advisors a "finder's fee" for bringing in clients to establish a charitable gift annuity with the charity. 16 Not only are these practices considered highly unethical, but they may also be a violation of the Philanthropy Protection Act of 1995. An advisor does not help a donor fulfill his charitable objective to donate to causes about which the client feels strongly if the advisor steers all potential donors to only one charity—the one that will pay him a finder's fee.

9.Drafting errors or unknowingly practicing law without a license

Improper use of form books or software can generate trouble. One attorney who hurriedly drafted a trust for his client learned this the hard way after inserting boiler plate language from a form book. The language gave the trustee of the CRT the power to pledge trust assets and to borrow funds. Those powers put the tax-exempt status of the CRT at risk. 17

Another drafting error occurred when an attorney used the wrong trust form in his word processing program and drafted a NIMCRUT for his clients instead of a standard CRUT. When the clients' CPA informed the clients they shouldn't have been taking a fixed 7% amount, they immediately went to their attorney to see what went wrong. 18

A different error occurred when a CRUT was drafted to give all the investment powers to the "investment counsel" and none to the trustee. Because the Regulations prohibit restrictions on the trustee's power to invest trust assets, the IRS found the trust did not qualify as a CRT. 19

One client, who intended to leave the bulk of her estate to a private foundation controlled by her family, discovered that the trust was drafted to limit the receiving charity to a public charity, thereby eliminating her private foundation as a charitable recipient. Fortunately, the IRS allowed a reformation to correct the drafting error. 20

In Estate of Starkey, 21 the lawyer drafted a testamentary trust for the benefit of a church and a college. Unfortunately, the language used to describe the church was "missionaries preaching the Gospel of Christ," which the court found provided for an unspecified class of beneficiaries and hence did not comply with the requirements of Section 2055 . The document did not contain language or express an intent that would allow it to qualify for a charitable deduction, and thus, a $1 million charitable deduction was lost. The decedent's son was the lawyer who did the drafting, and the court noted that he "never claimed to have any estate or charitable planning expertise."

The unauthorized practice of law can be committed by a non-lawyer when that person provides legal advice to another or prepares or approves legal documents for others. 22 The unauthorized practice of law can occur in charitable and estate planning through the misuse of computerized legal documents also known as "specimen" documents. 23

The reason for providing specimen documents is so that the planner can bring to the planning process a "value added service" for the client's attorney. These sample documents are intended for use by the client's attorney when that attorney may not be an expert in the field and could use a "starting point" in drafting. It's a way for the insurance agent to be professional and helpful in the planning process.

Unfortunately, these specimen documents can be misused by the planner or the client. Some non-lawyers have asked if they can "just fill in the blanks" because their client doesn't want to pay an attorney. Whether it is a specimen ILIT or a CRT, many costly errors have been made when a non-lawyer or donor believes that one document fits all and fills in the blanks of a specimen document. Further, many of these specimen trust agreements are ineffective because they are based on IRS prototype documents that are overly rigid and don't provide donors with the flexibility to create a legitimate planning tool that meets their unique needs. 24

In Ltr. Rul. 200218008 , lack of communication among all the parties led to an erroneously drafted trust document that should have been a NIMCRUT but was drafted as a standard CRUT. The error occurred when the planned giving officer of the charity provided the attorney with a specimen document of a CRUT after the clients had told their financial planner that they wanted a NIMCRUT rather than a CRUT.

Charitable gifts are complex, and the laws governing charitable giving as well as property law vary from state to state. Specimen documents do not take into account any nuances in state law. For this reason, the practice of providing specimen documents to planners has caused enough litigation to stop some insurance companies from supplying these documents.

10.Recommending aggressive charitable techniques

Planners could seriously harm their professional reputations when they recommend aggressive planning techniques that are later condemned by the IRS or the courts. One of the most recently promoted aggressive charitable planning arrangements was charitable reverse split-dollar. Under this strategy, the donor purchased a policy and had the death benefit split between the charity and the donor's family. However, the donor claimed a charitable deduction for the entire premium, knowing that the donor's family would personally benefit from this transaction. In 1999, charitable reverse split-dollar was ended by Congress, 25 and the IRS imposed some severe penalties in Notice 99- 36 . 26

Some life insurance companies refused to accept or underwrite business from their agents if this concept was behind the life insurance sale. Other companies accepted the insurance premiums without passing judgment on how that business came to the insurer or how the agents advised their clients regarding tax deductibility.

Even though Congress has enacted legislation stopping this technique, some promoters are still using this concept. The latest version of the technique uses a CRT that owns life insurance under the theory that the donor-income beneficiary is an "employee" of the CRT. The trust is employing the donor- income beneficiary and, under this employment theory, the charitable plan is said by promoters to fall outside the legislation prohibiting charitable reverse split-dollar. 27 However, this plan may raise self- dealing issues that will be sure to capture the IRS' attention.

Another charitable scam is the "lease-purchase" of insurable interests. A charity is approached about the purchase of life insurance inside the charity's life insurance trust, but with a twist. The donor agrees to allow the charity to purchase a $200,000 insurance policy on his life. The goal is to obtain 1,000 insureds within 30 days and create a $200 million trust. The kicker is that the insureds are guaranteed that they will never make a cash gift or premium payment to the charity's trust. All premiums are paid by a "good fairy" third party. When the trust reaches its goal, the good fairy determines the discounted value of the trust and pays the charity approximately $2,000 per insured (say $2 million in total). As the insureds die, all the insurance proceeds are paid to the third party.

What is really happening, of course, is that the third party-good fairy is using the charity to create an insurable interest on 1,000 people's lives—where there was no insurable interest. Entering into an arrangement that benefits a third party could cost the charity its tax-exempt status because the charity is greatly aiding in the private inurement of the third party.

From the third party's perspective, look at the Better Business Bureau's website, www.bbb.org/library/giftingclub, which cautions the public about "gifting clubs" that are a third party's pyramid scheme. To join the gifting club, individuals are asked to make a contribution to the top ranking members of the club. Each person is then encouraged to bring in other members to advance himself up the pyramid. Pyramid schemes frequently pay off only for those who create the scheme, leaving many "investors" with nothing.

Conclusion

The above discussion demonstrates the pitfalls that planners want to avoid as they work to help clients in charitable planning. Clients need complete disclosure of the advantages and disadvantages of the plan being proposed. Well-informed clients tend to appreciate the extra effort. Take the extra time and make sure the client's charitable plan is proposed with the client's best interests first.

Exhibit 1.Donating Various Types of Assets

These assets need extra special handling:

  • Encumbered real estate
  • Closely held C corporation stock
  • Tangible personal property, including artwork
  • Restricted (Rule 144) stock
  • Stock with a tender offer in place
  • Sole proprietorships, partnerships, and ongoing businesses
  • S corporation stock

These assets should generally be avoided in charitable gift planning:

  • Property with an existing sale agreement
  • Installment notes
  • Stock options (both qualified incentive stock options and non-qualified stock options)
  • Lifetime transfers of IRAs and qualified plan dollars
  • Lifetime transfers of commercial deferred annuities
  • Lifetime transfers of savings bonds

1

   Martin v. Ohio State University Foundation, 742 NE2d 1198 . See also Ltr. Rul. 200219012 , in which the IRS allowed a rescission of a CRUT where the donors were erroneously told by the charity that no distribution was required to be made from the CRUT until the trustee sold the donated stock.


2

   Section 664(b) .


3

   Section 170(a)(3) ; Rev. Rul. 69-63, 1969-1 CB 63 .


4

   Reg. 1.170A-4(b)(3)(i) Reg. 1.170A-4(b)(3)(i) .


5

   Section 72(t) .


6

  See S. 1924 and H.R. 7.


7

   Section 664(d)(1)(D) .


8

   Reg. 1.664- 2(b) .


9

   Section 664(c) .


10

   Bartels' Trust, 85 AFTR 2d 2000-1352 , 209 F3d 147 , 2000-1 USTC ¶50363 .


11

   Section 664(b) .


12

   In re Estate of Rowe, 274 App Div 2d 87 , 712 NYS2d 662 , 2000 NY Slip Op 7374, 2000 WL 1131974 .


13

   Crummey, 22 AFTR 2d 6023 , 397 F2d 82 , 68-2 USTC ¶12541 .


14

   Reg. 25.2503-3 Reg. 25.2503-3 .


15

   Section 6019 .


16

  Statement from the National Committee on Planned Giving and the Board of Directors of the American Council on Gift Annuities (11/2/01), in opposition to the practice of charitable organizations paying sales commissions to for-profit planners in connection with the sale of charitable gift annuities.


17

   Section 664(c) .


18

   Ltr. Rul. 199822041 . Also see Ltr. Rul. 199804036 , in which the grantors filed a malpractice action against the drafting attorney for the same error as found in Ltr. Rul. 199822041 , and Ltr. Rul. 199833008 , in which the attorney inadvertently failed to include a provision allocating realized post- contribution gain to income.


19

   Ltr. Rul. 8041100 ; Section 664 ; Reg. 1.664- 1(a)(3) .


20

   Ltr. Rul. 199818027 and Ltr. Rul. 200002029 .


21

   Estate of Starkey, 83 AFTR 2d 99-2572 , 58 F Supp 2d 939 .


22

  See, e.g., Committee on Professional Ethics and Conduct of the Iowa State Bar Association v. Baker, 492 NW2d 695 .


23

   The Florida Bar v. Brumbaugh, 355 So 2d 1186 (the selection and completion of preprinted legal documents is also the practice of law).


24

   Rev. Ruls. 72-395, 1972-2 CB 340 ; 80-123, 1980-1 CB 205 ; 82-128, 1982-2 CB 71 ; 82-165, 1982-2 CB 117 ; 88-81, 1988-2 CB 127 ; 92-57, 1992-2 CB 123 ; Rev. Procs. 89-20, 1989-1 CB 841 ; 89-21, 1989-1 CB 842 ; 90-30, 1990-1 CB 534 ; 90-31, 1990-1 CB 539 ; 90-32, 1990-1 CB 546 ; and 99-1, 1999-1 CB 6 .


25

  H.R. 1180, the Tax Relief Extension Act of 1999.


26

  1999-1 CB 1284.


27

   Section 170(f)(10) ; Notice 99- 36, 1999-1 CB 1284 .

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