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Stipulated Decision Entered in Estate Tax Dispute Over Artwork

APR. 25, 2022

Estate of Daniel Wildenstein et al. v. Commissioner

DATED APR. 25, 2022
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Estate of Daniel Wildenstein et al. v. Commissioner

ESTATE OF DANIEL WILDENSTEIN, DECEASED, ROYAL BANK OF CANADA TRUST COMPANY (BAHAMAS) LIMITED, AS SUCCESSOR TRUSTEE OF THE DELTA TRUST,
Petitioner,
v.
COMMISSIONER OF INTERNAL REVENUE,
Respondent.

UNITED STATES TAX COURT

DECISION

Pursuant to the agreement of the parties in this case, it is

ORDERED AND DECIDED: That there is no deficiency in estate tax due from petitioner.

That there is an addition to tax due from petitioner under the provisions of I.R.C. § 6651(a)(1) in the amount of $264,139.

That there is an addition to tax due from petitioner under the provisions of I.R.C. § 6651(a)(2) in the amount of $293,488.

That there is no penalty due from petitioner under the provisions of I.R.C. § 6662.

(Signed) Maurice B. Foley
Chief Judge

* * * * * 

It is hereby stipulated that the Court may enter the foregoing decision in this case.

It is further stipulated that petitioner is entitled to claim credit for State estate, inheritance, legacy or succession taxes, subject to presenting to respondent proof of such payment within the statutory period.

It is further stipulated that:

1. The 258 artworks set forth in a separate list designated as the “Settlement Set” by the parties are included in the U.S. gross estate of Daniel Wildenstein (the decedent) for U.S. federal estate tax purposes.

2. No other artworks or other assets, including the remaining artworks identified in the statutory notice of deficiency issued to petitioner on September 22, 2017, are included in the decedent's U.S. gross estate.

3. For federal estate tax purposes, the values of the 258 artworks comprising the Settlement Set are the values as of the date of the decedent's death, October 23, 2001, that are recorded on the Settlement Set list, resulting in a total U.S. gross estate of $30,969,660.

4. Additions to tax for failure to file and for failure to pay pursuant to Internal Revenue Code §§ 6651(a)(1) and (2) apply with respect to the $2,804,060 value of 90 artworks in the Settlement Set.

5. Of the previously assessed tax of $98,132,545, $81,112,232 will be abated to reflect the agreed upon federal estate tax liability of $17,020,313.

6. Of the previously assessed addition to tax for failure to file of $22,079,822 pursuant to I.R.C. § 6651(a)(1), $21,815,683 will be abated to reflect the agreed upon failure-to-file addition to tax of $264,139.

7. Of the previously assessed addition to tax for failure to pay of $24,533,136 pursuant to I.R.C. § 6651(a)(2), $24,239,648 will be abated to reflect the agreed upon failure-to-pay addition to tax of $293,488.

8. On March 11, 2019, and August 28, 2020, petitioner made payments of $802,000 and $39,034, respectively, in partial satisfaction of the estate tax owed.

DRITA TONUZI
Deputy Chief Counsel (Operations)
Internal Revenue Service

DAVID M.J. REIN
Tax Court Bar No. RD0564
MARK A. POPOVSKY
Tax Court Bar No. PM0438
Sullivan & Cromwell LLP
Counsel for Petitioner
125 Broad Street
New York, New York 10004
Telephone: 212-558-4000
reind@sullcrom.com
popovskym@sullcrom.com

Date: April 19, 2022

By: CARINA J. CAMPOBASSO
Senior Counsel (Small Business/Self-Employed)
Tax Court Bar No. CC0548
10 Causeway Street, Room 401
Boston, MA 02222-1061
Telephone: (617) 788-0813
carina.j.campobasso@irscounsel.treas.gov

Date: April 20, 2022

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