The Challenges For Treasury To “Legislate”

Last week, the U.S. Treasury surprised almost no one by concluding in Revenue Ruling 2023-02 that IRC section 1014’s basis step-up does not apply to irrevocable grantor trusts that are not included in the grantor’s estate. So, what is notable about a revenue ruling to which maybe 100 people paid attention?

Well, less than a month ago, on March 20, 2023, Senators Warren, Sanders, Van Hollen, and Whitehouse, asked Secretary Yellen to take various actions to “limit the ultra-wealthy’s abuse of trusts” for estate and gift tax purposes (hereinafter the “Letter”). The requested actions included among other items: