Emily S. Wilson, as Executrix of the Estate of Joseph A. Wilson, et al. v. United States

Beginning in 1997, the Internal Revenue Service (“IRS”) required the owners of foreign trusts to file an annual Form 3520, disclosing the trust’s financial activities for the year. This filing requirement was set out in Form 3520 itself and its instructions, as well as a number of IRS official publications. Notwithstanding, in an effort to prevail in this litigation, the Government has now taken the conflicting position that there was no requirement for a trust owner to file Form 3520 until 2010, when the applicable Internal Revenue Code (“I.R.C.” or “Code”) section was amended. The Second Circuit Court of Appeals (“Court of Appeals”) erroneously adopted the Government’s position. The Questions Presented are:

1. Whether the Court of Appeals erred in not resolving the ambiguity in the statutory provisions of 28 U.S.C. §§ 6048 and 6677 in favor of Petitioners, as required by this Court’s decision in Gould v. Gould, 245 U.S. 151 (1917) and other decisions of this Court following it?

2. Whether the Court of Appeals erred in not giving deference under Chevron or Skidmore to the IRS’ position that it was authorized, pursuant to I.R.C. § 6048(b), to require trust owners to file an annual Form 3520?

3. Whether the Court of Appeals erred in disregarding well-established IRS policy and practice, but instead adopting the Government’s litigating position that no Form 3520 was required to be filed by a trust owner until 2010, on which basis the Court of Appeals held that the 35% penalty applicable to a trust beneficiary under U.S.C. § 6048(c) applied to Taxpayer as both the owner and sole beneficiary of a foreign trust?