Candy Heirs Challenge Gift, Estate Tax Deficiencies in Tax Court

(a) Respondent erred by treating the principal distributions of Series B-1 Preferred Stock of Mars, Incorporated, dated on or about August 5, 2003, from the Forrest Edward Mars Trust, Dated January 3, 1940, and the Audrey Meyer Mars Trust, Dated January 3, 1940 — Forrest Edward Mars, Jr. Share, (together, the "1940 Trusts") as gifts from Decedent to Victoria B. Mars, Valerie A. Mars, Pamela M. Wright, and Marijke E. Mars.

(b) Respondent erred by treating the principal distributions of Series B-2 Preferred Stock of Mars, Incorporated, dated on or about November 17, 2008, from the 1940 Trusts as gifts from Decedent to Victoria B. Mars, Valerie A. Mars, Pamela M. Wright, and Marijke E. Mars.

(c) Respondent erred by treating the principal distributions of Series B-3 Preferred Stock of Mars, Incorporated, dated on or about August 21, 2014, from the 1940 Trusts as gifts from Decedent to Victoria B. Mars, Pamela M. Wright, and Marijke E. Mars.

(d) Respondent erred by failing to allow a credit against the asserted deficiency in estate tax for the additional gift taxes that Respondent contends are payable by the estate.

(e) Respondent erred by failing to allow a deduction against the taxable estate for the debt that the Decedent would have for the additional gift taxes that respondent contends are payable by the estate.

(f) respondent erred in not allowing as additional deductions amounts payable with respect to the administration of decedent's estate, including additional legal fees and disbursements and other related and ancillary amounts incurred and to be incurred, that would affect the adjustments described in the Notice that Petitioner is not otherwise challenging.

(a) At all relevant times, the 1940 Trusts were governed by Illinois law.

(b) At all relevant times, the principal of the 1940 Trusts included shares of common stock of Mars, Incorporated.

(c) Mars, Incorporated declared and paid preferred stock dividends on common stock in 2003, 2008, and 2014.

(d) Following these dividends, the principal of the 1940 Trusts included shares of common stock and preferred stock of Mars, Incorporated.

(e) On or about August 5, 2003, the 1940 Trusts collectively transferred 3,000 shares of Series B-1 Preferred Stock of Mars, Incorporated to each of Victoria B. Mars, Valerie A. Mars, Pamela M. Wright, and Marijke E. Mars. On the date of transfer, the transferred Series B-1 Preferred Stock had a fair market value of $60,000,000.

(f) On or about September 26, 2008, the 1940 Trusts collectively transferred 1,875 shares of Series B-2 Preferred Stock of Mars, Incorporated to each of Victoria B. Mars, Valerie A. Mars, Pamela M. Wright, and Marijke E. Mars. On the date of transfer, the transferred Series B-2 Preferred Stock had a fair market value of $37,500,000.

(g) On or about August 21, 2014, the 1940 Trusts collectively transferred 3,000 shares of Series B-3 Preferred Stock of Mars, Incorporated to each of Victoria B. Mars, Pamela M. Wright, and Marijke E. Mars. On the date of transfer, the transferred Series B-3 Preferred Stock had a fair market value of $198,000,000.

(h) The trustee for the 1940 Trusts at the time of the transfers described above in paragraphs 5(e), (f), and (g) was BMO Harris Bank, N.A., formerly known as Harris Trust and Savings Bank ("Trustee").

(i) Pursuant to the terms of the 1940 Trusts, the Trustee was permitted to make discretionary distributions of principal from the 1940 Trusts to Victoria B. Mars, Valerie A. Mars, Pamela M. Wright, and Marijke E. Mars.

(j)  In compliance with the terms of the 1940 Trusts, the Trustee made discretionary distribution of principal from the 1940 Trusts to Victoria B. Mars, Valerie A. Mars, Pamela M. Wright, and Marijke E. Mars as described above in paragraphs 5(e), (f), and (g).

(k) The Trustee's discretionary distributions of Trust principal to Victoria B. Mars, Valerie A. Mars, Pamela M. Wright, and Marijke E. Mars as described above in paragraphs 5(e), (f), and (g) were not gifts from the Decedent.

(l) Petitioner has incurred, and expects to continue to incur, various expenses in connection with administration of the estate, including expenses to contest the deficiencies asserted by Respondent.

(1) Determine that there is no deficiency in gift tax for Petitioner's taxable years 2003, 2008, and 2014;

(2) Determine that there is no deficiency in federal estate tax with respect to Petitioner;

(3) Grant Petitioner a refund of federal estate tax resulting from the Court's determination of Petitioner's actual estate tax liability; and

(4) Grant such other and further relief to which Petitioner may be entitled.