Though it has evidence from Mr. D’s personal physician his life expectancy was normal for a man in his age group  which according to IRS tables should have been around two years; what caught the IRS’ eye is the fact that the estate planning transfers [slightly less than a billion dollars-worth] came just two months before Davidson died.
The IRS will claim the money was passed merely to avoid taxes and was done when it was clear Mr. D was on death’s door. That in the IRS’ view is an improper use of the techniques the attorneys employed.
The IRS will say it knows how to properly calculate an estate tax form and the attorneys got it wrong. Davidson’s attorneys will say the IRS hired an outside valuation firm to figure out the value of the Guardian Industries’ preferred and common stock at the time Mr. Davidson died and they muffed it. Davidson’s estate claims the evaluating company did its work in 2012 and ignored the 2009 automotive industry meltdown. Guardian Industries posted a loss that year.
If you’ve stayed with me this long congratulations! You’re an estate planning junkie like me.
Now, often times the IRS negotiates settlements. Yet with this kind of money at stake those negotiations will be hard fought and more than likely protracted and bitter battles. Think about it, if they meet in the middle the Davidson family has to hand over one BILLION dollars!
This case is being heard in the Washington, D.C. tax court and will likely last years. It is also likely that the Davidson estate will not be able to walk away cleanly without some tax due.
On the other hand, the feds appear to be piling every stick of furniture and every possible dime they can see in the Davidson empire onto their burning claim hoping to burn the Davidsons for something near the middle. This is why we have judges and appeals.
With 17 trillion dollars in debt, a billion might actually make a difference. Even if it means the Davidson heirs lose a home or two or some jewelry or like that farmer, sell off that stake in the family business.