Constitutionality of a Retroactive Federal Estate Tax

Howard RichshaferFederal estate tax was repealed in 2001 for decedents dying during 2010. Repeal was not an oversight. Congress made a deliberate choice in repealing the tax during 2010 albeit making it effective again on January 1,2011.

In December 2009, the House passed a bill retaining the tax for 2010 at the same $3.5 million exemption level at 45%; but the Senate failed to extend the tax when it convened in December.

It is widely anticipated that Congress will extend the tax making it retroactive to January 1, 2010.

  • The question many have raised is whether a retroactive estate tax is constitutional.

Aside from the constitutional issue, experts say retroactivity presents difficult policy issues. That is, a decedent who arranged her estate tax affairs relying on the 2001 legislation that repealed the tax during 2010
would be unable to modify her estate tax planning if she dies in 2010 but before the retroactivity occurs.

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    Howard L. Richshafer

    Howard Richshafer joined Wood + Lamping in 2008, and his practice is focused on civil and criminal tax problems, estate planning and probate, tax court trial work, mergers and acquisitions, and general corporate business matters. Howard is also a licensed Ohio CPA. Over the past 40 years, Howard has represented clients experiencing all types of civil and criminal tax problems with IRS. Those problems include IRS audits, IRS criminal investigations, enforced collection of unpaid tax liabilities involving levies, liens, and seizures of assets and income.

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