This time it’s tax insurance, for which the co-ex’r-beneficiaries want to deduct the premiums ($14 million) on the 706, with which Judge Adam B. (“Sport”) Landy must deal in Estate of Stanley E. Fulton, Deceased, Michael B. Fulton and Elizabeth Fulton Jones, Co-Executors, Docket No. 7200-22, filed 5/7/25. The co-ex’rs claim the premiums are Debts of the Decedent.

The co-ex’rs also claim reasonable reliance “on the tax advice received ‘from two preeminent global law firms.'” Order, at p. 2.

This is the usual documents discovery jumpball.

Judge Sport Landy says hand over the insurance info, despite the co-ex’rs’ claim that the insurance is not relevant. IRS amended its Answer to raise co-ex’rs’ nonliability for tax. What and whom does the insurance cover?

As to the rest of IRS’ request, “respondent maintains that, because petitioners have claimed a reasonable reliance defense against the accuracy-related penalty, petitioners have placed their states of mind at issue and all tax-related communications with petitioners’ prior counsel are therefore at issue and discoverable. However, the only relevant information is that information available to petitioners at the time they filed the estate tax return or at the time they acquired the Aon insurance policies, whichever is later.” Order, at pp. 4-5.

The 706 came first, the insurance about two weeks later. So IRS gets nothing earlier than date of death or later than insurance policy purchase.

And if privilege claimed, provide a contemporaneous privilege log.