I have written several times about the Wandry decision, and its respect for a formula adjustment clause in the gift tax arena. This decision has had its ups and downs, since it came out earlier this year.
Up – the Tax Court issues its decision upholding the clause.
Down – the IRS appeals the decision.
Up – the IRS withdraws its appeal.
Down – the IRS has now issued its nonacquiescence to the Wandry decision.
After the IRS withdrew its appeal, I don’t think that there were too many people out there who read that as an IRS concession that these clauses were valid and effective (although many hoped so). With its nonacquiescence, the IRS has now made clear that it does not believe Wandry is good law.
For more on Wandry, click here.
What exactly is a “nonacquiescence?” The Internal Revenue Bulletin provides that it means, as to a Tax Court decision, that “although no further review was sought, the Service does not agree with the holding of the court and, generally, will not follow the decision in disposing of cases involving other taxpayers.”
AOD in 2012-46 IRB