Skip to Main Content

Tax Notes Quotes Beth Kaufman on Proposed IRS Rule Concerning Retained Interests

December 2, 2019, Tax Notes

A warning included in the estate tax anti-clawback regs about possible restrictions on retained interests and similar arrangements makes the final rules appear decidedly less taxpayer-friendly.

. . .

Other practitioners see more reason for alarm.

“If there is an antiabuse rule in the future . . . the IRS may be able to sustain the position that the rule applies to decedents dying after the rule is proposed or finalized because it impacts the treatment of adjusted taxable gifts only at death,” said Beth Shapiro Kaufman of Caplin & Drysdale.

. . .

Kaufman said that could be a problem for moderately wealthy taxpayers who can’t afford to part with enough assets to use up their bonus exclusion with no strings attached. “A person in that situation could conclude that the potential benefits of one of these [retained interest] transactions outweigh the risks,” she said.

. . .

Kaufman likewise suggested that if the IRS issues proposed antiabuse rules and takes the aggressive approach, practitioners would likely argue that “it is the IRS’s own rules that lead to this result, and therefore engaging in a transfer that takes advantage of the rules is not an abuse at all.”

For the full article, please visit Tax Notes’ website (subscription required).


About Caplin & Drysdale
Celebrating our 55th Anniversary in 2019, Caplin & Drysdale continues to be a leading provider of legal services to corporations, individuals, and nonprofits throughout the United States and around the world. We are also privileged to serve as legal advisors to accounting firms, financial institutions, law firms, and other professional services organizations.

The firm's reputation over the years has earned us the trust and respect of clients, industry peers, and government agencies. Moreover, clients rely on our broad knowledge of the law and our keen insights into their business concerns and personal interests. Our lawyers' strong tactical and problem-solving skills -- combined with substantial experience handling a variety of complex, high stakes, matters in a boutique environment -- make us one the nation's most distinctive law firms.

With offices in New York City and Washington, D.C., Caplin & Drysdale's core practice areas include:
For more information, please visit us at
Washington, DC Office:
One Thomas Circle NW
Suite 1100
Washington, DC 20005
New York, NY Office:
295 Madison Avenue
12th Floor
New York, NY 10017


This communication does not provide legal advice, nor does it create an attorney-client relationship with you or any other reader. If you require legal guidance in any specific situation, you should engage a qualified lawyer for that purpose. Prior results do not guarantee a similar outcome.

Attorney Advertising
It is possible that under the laws, rules, or regulations of certain jurisdictions, this may be construed as an advertisement or solicitation.
©2021 Caplin & Drysdale, Chartered
All Rights Reserved.

Related Professionals

Related Practice Area(s)