The estate of actor James Caan contended that he had accurately rolled over the entire balance of an IRA from UBS to Merrill Lynch. The IRS largely concurred with this stance, save for the transfer of an interest in a non-publicly traded hedge fund. This asset encountered numerous challenges during its transfer from UBS to Merrill Lynch. Ultimately, the hedge fund interest was liquidated, and the proceeds were transferred to Merrill Lynch—nearly a year after UBS reported the fund’s distribution to Mr. Caan.

In Estate of Caan v. Commissioner,[1] the estate posited two potential explanations: either UBS never actually disbursed the hedge fund from the IRA, or the IRS unjustly declined to grant late rollover relief through a private letter ruling request. The Tax Court did not concur with either proposition. It determined that UBS had indeed disbursed the amount in 2015. Moreover, the IRS’s denial of relief was deemed appropriate since the exact asset distributed from the UBS IRA was not the one transferred to the new Merrill Lynch IRA, thus contravening the stipulations of IRC §408(d)(3)(A)(i).

Facts of the Case

The facts of the case are outlined by the Tax Court as follows:

This case concerns a portion of the late actor’s wealth, namely, two individual retirement accounts (IRAs) that he held at the Union Bank of Switzerland (UBS). One IRA held cash, mutual funds, and stock in exchange-traded funds. The other held similar assets as well as a partnership interest in P&A Multi-Sector Fund, L.P., a hedge fund (P&A Interest and P&A Fund, respectively).

IRAs are not limited to holding traditional assets such as cash, bonds, and publicly traded securities; they can still qualify for tax advantages while holding alternative assets, such as non-publicly traded partnership interests like the P&A Interest. However, in that case the Internal Revenue Service (IRS) requires that the IRA’s trustee or custodian report the fair market value of the alternative assets yearly, valued as of December 31 of the preceding year (yearend fair market value). See I.R.C. §408(i);1 Treas. Reg. § 1.408-5; 2014 Instructions for Forms 1099-R and 5498, at 20, 22 (directing trustees and custodians to report the yearend fair market value of IRA assets “that are not readily tradable on an established US or foreign securities market or option exchange, or that do not have a readily available [fair market value]”). The custodial agreement that governed Mr. Caan’s two IRAs at UBS reflected that requirement; it was Mr. Caan’s responsibility to provide UBS with the yearend fair market value of the P&A Interest every year. In 2015 Mr. Caan did not provide UBS with the P&A Interest’s 2014 yearend fair market value; as a result, UBS refused to continue serving as the P&A Interest’s custodian and sent a letter to Mr. Caan notifying him of a distribution of the P&A Interest. UBS then issued Mr. Caan a Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., which reported to the IRS a distribution of the P&A Interest. UBS used the P&A Interest’s 2013 yearend fair market value, which was the last yearend fair market value known to UBS, as the value of the distribution.

Also in 2015, but before UBS sent the distribution letter to Mr. Caan, the wealth management advisor who managed both of Mr. Caan’s IRAs resigned from UBS and began a similar role at Merrill Lynch, Pierce, Fenner, and Smith, Inc. (Merrill Lynch). That advisor — Michael Margiotta — then convinced Mr. Caan to transfer both IRAs to Merrill Lynch under his management. All assets in both IRAs, except for the P&A Interest, were subsequently transferred to a single IRA at Merrill Lynch through the Automated Customer Account Transfer Service (ACATS). Since the P&A Interest was ineligible for transfer through ACATS, Mr. Margiotta directed the P&A Fund to liquidate the P&A Interest and transfer the cash proceeds to the Merrill Lynch IRA. That liquidation and cash transfer did not occur until almost a year after UBS notified Mr. Caan that it had distributed the P&A Interest.[2]

The opinion goes on to describe the tax treatment claimed on Mr. Caan’s returns and the later IRS dispute:

On his federal income tax return for tax year 2015, Mr. Caan reported a distribution of the P&A Interest but claimed that it was nontaxable. The Commissioner of Internal Revenue (Commissioner) disagreed with that position and, in a notice of deficiency dated April 30, 2018, determined an income tax deficiency of $779,915 for tax year 2015 and a section 6662(a) accuracy-related penalty of $155,983. Mr. Caan then filed a Petition with this Court for redetermination of his 2015 income tax deficiency. See I.R.C. §6213(a). Shortly before filing that Petition, Mr. Caan requested a private letter ruling from the IRS granting him a waiver of the 60-day period for rollovers of IRA distributions (60-day rollover period). See I.R.C. §408(d)(3)(I). The IRS denied that request on the grounds that Mr. Caan did not meet the “same property” requirement in section 408(d)(3)(A)(i) and (D). See Lemishow v. Commissioner, 110 T.C. 110, 113 (1998) (applying the “same property” requirement of section 408(d)(3) under similar circumstances to deny the taxpayer's claim of a tax-free rollover), supplemented by 110 T.C. 346 (1998).[3]

Why is This a Reported Tax Court Case?

Readers who have examined the case citation may have observed that this is a reported Tax Court decision, as opposed to a memorandum decision, which we frequently encounter. Reported cases address legal matters that the Tax Court has not previously deliberated and are deemed authoritative for subsequent Tax Court cases involving the same issue.

In this instance, the designation as a reported case arises because the Tax Court evaluated its jurisdiction to review the IRS’s choice to decline the late rollover relief under IRC §408(d)(3)(I) on the grounds of abuse of discretion—a question not previously presented to the court.

The Court decided that it has the right to review the IRS’s decision on the private letter ruling request based on its decision in the case of Trimmer v. Commissioner, 148 T.C. 334 (2017).

In Trimmer v. Commissioner, 148 T.C. 334, 345-49 (2017), we considered similar questions in a case similar to this one. Trimmer concerned section 402, which governs distributions from a qualified plan known as an employees’ trust. A short background on section 402 is helpful in understanding what transpired in Trimmer. Section 402(a) provides that a distribution from an employees’ trust is “taxable to the distributee, in the taxable year of the distributee in which distributed.” Section 402(c) allows for rollover contributions similar to how section 408(d)(3) allows for rollover contributions for IRAs. Section 402(c)(1) excludes from gross income distributions from an employees’ trust that are thereafter contributed “to an eligible retirement plan.” Section 402(c)(3)(A) provides that such a contribution must be made no later than 60 days “following the day on which the distributee received the property distributed.” Section 402(c)(3)(B) allows the IRS to “waive the 60-day requirement . . . where the failure to waive such requirement would be against equity or good conscience, including casualty, disaster, or other events beyond the reasonable control of the individual subject to such requirement.”

One of the taxpayers in Trimmer held retirement accounts in two employees’ trusts. Trimmer, 148 T.C. at 336. This taxpayer received a distribution from each of his two retirement accounts. Id. He then deposited the two distribution checks into a joint bank account he held with his wife. Id. Over 10 months later, on the advice of his tax return preparer, he opened an IRA and rolled over the two distributions into his new IRA. Id. at 336-37. On his joint income tax return, he reported the two distributions but claimed that they were nontaxable. Id. at 337. The IRS sent him a letter proposing, among other things, to include the two distributions in income. Id. In his response to the IRS’s letter, the taxpayer explained his circumstances, which included a mental health issue, and asked for a waiver of the 60-day rollover period. Id. at 338. The IRS summarily denied the request in a boilerplate response. See id. at 338-39.

In deciding that we had jurisdiction to review the IRS’s denial of a hardship waiver under section 402(c)(3)(B), we stated:

Nothing in section 402(c)(3) expressly precludes judicial review, nor does the legislative history reveal any such congressional intent. To the contrary, because the denial of a hardship waiver can affect directly the existence and amount of any asserted deficiency — as it does in this case — the procedures Congress has established for judicial review of the Commissioner’s deficiency determinations logically contemplate review of such a denial as one element of the deficiency determination.

Trimmer, 148 T.C. at 346-47 (footnote omitted) (citing Estate of Gardner v. Commissioner, 82 T.C. 989, 996 (1984)). We therefore concluded that our jurisdiction to redetermine deficiencies under section 6213(a) includes jurisdiction to review any discretionary agency actions that would affect the deficiency amount. Trimmer, 148 T.C. at 348; Estate of Gardner, 82 T.C. at 999. We also concluded, on the basis of our prior caselaw, that the appropriate standard of review is abuse of discretion. Trimmer, 148 T.C. at 348.[4]

The Tax Court concluded the situation was the same for IRAs:

Our reasoning in Trimmer applies here as well. Sections 402(c)(3)(B) and 408(d)(3)(I) are worded identically. Neither the text of section 408(d)(3) nor its legislative history precludes judicial review; and whether the Commissioner grants a waiver under section 408(d)(3)(I) is a discretionary determination that would affect a taxpayer’s deficiency. We therefore extend our holding in Trimmer, 148 T.C. at 345-49, to denials of waivers under section 408(d)(3)(I). In other words, we hold that we do have jurisdiction to review the Commissioner’s denial of a waiver under section 408(d)(3)(I) and that we review such a denial for abuse of discretion. See Trimmer, 148 T.C. at 348; Mailman v. Commissioner, 91 T.C. 1079, 1084 (1988) (“The standard of review most appropriate in the case of a failure to grant a waiver is . . . whether [the Commissioner] abused his discretion.”); Estate of Gardner, 82 T.C. at 1000; see also 5 U.S.C. §706(2)(A) (providing that generally a reviewing court shall “hold unlawful and set aside agency action, findings, and conclusions” that are “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law”).[5]

Although the Tax Court’s authority to review the IRS decision represented a victory for the taxpayer, it’s noteworthy that the outcome of the review itself was not advantageous to the taxpayer.

Holding Non-Traditional Assets in an IRA

The Tax Court highlighted that while it is permissible to hold "non-traditional" assets in an IRA, such a choice presents unique challenges, leading to an unfavorable outcome in this particular case.

This case is a quintessential example of the pitfalls of holding nontraditional, non-publicly traded assets in an IRA. Failure to follow the labyrinth of rules surrounding these assets can mean forfeiting their tax-advantaged status.[6]

As previously mentioned, the law mandates that the custodian of the IRA report the fair market value of this non-publicly traded interest annually. This stipulation eventually prompted UBS to decline its role as the IRA’s custodian.

The custodial agreement with UBS regarding this issue is summarized by the Tax Court as follows:

During 2008 Mr. Caan opened two custodial accounts with UBS. These accounts were governed by a written custodial agreement between UBS and Mr. Caan. Since the agreement met the requirements of section 408(a), both custodial accounts qualified as IRAs by operation of section 408(a) and (h).

The custodial agreement’s Article IV, a portion of which is excerpted supra pp. 6-7, sets forth the terms of UBS’s custodianship of the P&A Interest. The pertinent terms are the following: (1) It was Mr. Caan’s responsibility to provide UBS with the P&A Interest’s yearend fair market value by January 15 of each year; (2) it was Mr. Caan’s responsibility to attempt to obtain the P&A Interest’s yearend fair market value from the P&A Fund directly, and if he could not obtain it from the P&A Fund, to provide UBS with an appraisal from “an independent, qualified appraiser”; and (3) if Mr. Caan did not fulfill his duty of providing UBS with the P&A Interest’s yearend fair market value for a given year, then UBS would distribute the P&A Interest to him and issue him a Form 1099-R reflecting “the last available value” of the P&A Interest.[7]

The taxpayer contended that UBS had never truly distributed the IRA interest to Mr. Caan. However, the Tax Court determined otherwise. It appeared that Mr. Caan's advisors may have overlooked the correspondence from UBS, which explicitly stated they were distributing the interest to Mr. Caan in November of 2015.

Mr. Caan clearly did not provide UBS with the P&A Interest’s 2014 yearend fair market value by January 15, 2015, because in March 2015 UBS sent a letter to the P&A Fund requesting that value. After receiving no response from the P&A Fund, in August 2015 UBS sent Mr. Caan (through PBSM) a letter requesting the P&A Interest’s 2014 yearend fair market value and giving him 30 days to respond. Mr. Caan did not respond to that letter, leading UBS to send him a notice that the P&A Interest would be distributed and later a confirmation letter that the interest was distributed as of November 25, 2015. The confirmation letter also explained the definite and potential consequences of UBS’s resignation as the P&A Interest’s custodian, including that UBS would issue Mr. Caan a Form 1099-R reporting a distribution.

These letters show that UBS went above and beyond what the custodial agreement required of it. It had no obligation to contact the P&A Fund to obtain the P&A Interest’s 2014 yearend fair market value, yet it did so on Mr. Caan’s behalf. It also sent Mr. Caan a request for that value and gave him over 30 days to respond. Although the onus was on Mr. Caan to provide UBS with the P&A Interest’s 2014 yearend fair market value, UBS nevertheless tried to help him in fulfilling his duties under the custodial agreement. After receiving no response to its multiple requests, UBS acted well within its rights under the custodial agreement by resigning as the P&A Interest’s custodian and distributing the P&A Interest in kind. It even went further by recommending that Mr. Caan contact his tax advisor, reminding him of the 60-day rollover period, and providing him with the names of two firms willing to serve as custodians of the P&A Interest. We therefore determine that UBS distributed the P&A Interest to Mr. Caan on November 25, 2015.[8]

The estate essentially posited that UBS was being untruthful about dispatching these letters. However, the Tax Court did not deem this assertion plausible.

The Estate argues that UBS’s distribution of the P&A Interest was a “phantom distribution,” alleging that UBS resigned as the P&A Interest’s custodian — and purported to “distribute” the interest — without notifying Mr. Caan, PBSM, or Mr. Margiotta. The Estate further alleges that UBS merely generated, without actually mailing, the letters that requested the P&A Interest’s 2014 yearend fair market value and only later notified Mr. Caan of a purported distribution. In support of this argument, the Estate relies heavily on the trial testimony of Ms. Cohn and Mr. Margiotta. Both witnesses testified that they had never seen the relevant letters from UBS until this litigation had begun and had not known about UBS’s making the distribution.

We do not find that portion of either witness’ testimony credible. As the trier of fact, we may credit testimony in full, in part, or not at all. See Neonatology Assocs., P.A. v. Commissioner, 115 T.C. 43, 84 (2000), aff’d, 299 F.3d 221 (3d Cir. 2002). In this instance, the letters were produced in a logical order, each referencing the prior one, and they were all maintained by UBS in its files. The last of the letters, which discussed the in-kind distribution, was followed by the promised Form 1099-R; moreover, all further IRA account statements from UBS ceased. We find it highly unlikely that PBSM received all mail from UBS — statements, the Form 1099-R, and other correspondence — except for the key letters (which were addressed to PBSM). Additionally, the March 2016 email between Ms. Cohn and Mr. Margiotta suggests that both of them knew of UBS’s representations that it had distributed the P&A Interest. It seems far more likely that there was simply a lack of communication and coordination between the professionals overseeing Mr. Caan’s affairs, especially given the timing of UBS’s letters, Mr. Margiotta’s move from UBS to Merrill Lynch, and the emails between Mr. Margiotta and Ms. Cohn. If all parties believed that UBS was still the P&A Interest’s custodian, why did no one follow up with UBS when it ceased to mail account statements for the IRAs? And why, if everyone was indeed blindsided by the Form 1099-R, did no one promptly follow up with UBS regarding it? (That followup did not occur until after the IRS issued its Form CP2000.) The Estate has offered no satisfactory explanation to fill these holes in its theory.[9]

The estate put forth the argument that Mr. Caan never effectively received the interest. This assertion appears to be grounded in the observation that partnership interest statements and related documentation continued to indicate UBS as the IRA custodian within the partnership's records.  But the Court found there was constructive receipt by Mr. Caan:

The Estate further argues that no distribution occurred because Mr. Caan was never placed in actual or constructive receipt of the P&A Interest. We disagree. Under the constructive receipt doctrine “funds [or other property] which are subject to a taxpayer's unfettered command and which he is free to enjoy at his option are constructively received by him whether he sees fit to enjoy them or not.” Estate of Brooks v. Commissioner, 50 T.C. 585, 592 (1968); see also Corliss v. Bowers, 281 U.S. 376, 378 (1930); Treas. Reg. § 1.451-2(a). UBS's December 2015 confirmation letter asked Mr. Caan to contact the P&A Fund and “instruct them to re-register the [P&A Interest] into [his] individual name.” We understand that sentence of the letter to mean that, beginning on November 25, 2015, Mr. Caan could have presented that letter to the P&A Fund and instructed it to re-register the P&A Interest in his name without needing any further involvement from UBS.11 As well, Mr. Caan could have rolled over the P&A Interest into an IRA managed by any other custodian or trustee willing to accept it. The presence of these options means that Mr. Caan had unfettered control over the P&A Interest and was therefore in constructive receipt of it.[10]

And the Court took little time dismissing the claim that UBS had failed to resign as a trustee under California law, finding that the relationship was not a trust relationship but rather a custodial one and the agreement was covered by New York law.

Lastly, the Estate attempts to discredit UBS’s resignation by contending that no resignation or distribution occurred under California trust law. This argument is a nonstarter for two reasons: (1) Mr. Caan’s relationship with UBS was a custodial relationship, not a trust relationship, and (2) the custodial agreement states that it is governed by New York law, not California law.[11]

Was the Interest Transferred to Merrill Lynch in a Way That Would Qualify as a Rollover?

The Tax Court determined that, irrespective of whether the entire process of transferring funds to Merrill Lynch occurred within the 60-day window subsequent to UBS’s distribution of the interest to Mr. Caan, the transaction would not be deemed a valid rollover, primarily because it contravened the same asset rule.

The Court begins with a discussion of the IRA rollover rules.

Section 408(d)(3)(A)(i) provides that an IRA distribution is not taxable if “the entire amount received (including money and any other property)” is contributed into another IRA within 60 days of the distribution. The taxpayer may not change the character of any noncash distributed property between the time of the distribution and the time of the contribution. See Lemishow, 110 T.C. at 113; Treas. Reg. § 1.408-4(b)(1).

In the previous section, we determined that UBS distributed the P&A Interest to Mr. Caan on November 25, 2015. Sixty days from that date was January 24, 2016. Since the latter date was a Sunday, the 60-day deadline was extended to “the next succeeding day which is not a Saturday, Sunday, or a legal holiday.” I.R.C. §7503. Thus, Mr. Caan had until January 25, 2016, to contribute the P&A Interest to another IRA.[12]

The Court explicitly pointed out that the procedure utilized to transition this final portion into a Merrill Lynch Individual Retirement Account (IRA) did not adhere to the requisite guidelines.

We acknowledge that Mr. Caan executed a request in October 2015 to transfer all assets in his two UBS IRAs to Merrill Lynch and that all assets other than the P&A Interest were transferred through ACATS shortly thereafter. Troublesome here is how the P&A Interest was handled. Mr. Margiotta (acting on Mr. Caan’s behalf) submitted a withdrawal request to the P&A Fund in December 2016, asking it to fully liquidate the P&A Interest and remit the proceeds directly to the Merrill Lynch IRA. This action occurred over a year after the UBS distribution. The P&A Fund then remitted a total of $1,532,605.46 in three separate wire transfers between January 23 and June 21, 2017.

There are three problems with the way the P&A Interest was handled. First, and most importantly, in liquidating the P&A Interest Mr. Caan changed the character of the property; yet section 408(d)(3)(A)(i) required him to contribute the P&A Interest itself, not cash, to another IRA in order to preserve its tax-deferred status. See Lemishow, 110 T.C. at 113; Treas. Reg. § 1.408-4(b)(1). Second, the contribution of the cash proceeds from the liquidation occurred long after the January 25, 2016, deadline. And finally, the P&A Fund’s three transfers to the Merrill Lynch IRA constituted three separate contributions; yet section 408(d)(3)(B) allows for only one rollover contribution in any one-year period, making only the first transfer potentially eligible for a tax-free rollover.[13]

The change in the character of the property is explained in the opinion as follows:

As discussed supra pp. 17-18, our caselaw and the regulations have interpreted sec    tion 408(d)(3)(A)(i) to require the same money or the same property to be transferred in a rollover, rather than merely similar property or property of equivalent value. See Lemishow, 110 T.C. at 113; Treas. Reg. § 1.408-4(b)(1). In Lemishow, we discussed the legislative history supporting this interpretation:

Both rollover provisions [viz, section 408(d)(3) and section 402(c), the latter of which governs rollovers from employment-based tax-deferred plans, see I.R.C. §401, to any of a number of tax-deferred plans, including IRAs] were enacted as part of the Employee Retirement Income Security Act of 1974, Pub. L. 93-406, sec. 2002(b), (g)(5), 88 Stat. 829, 959-964, 968-969. The purpose of allowing a tax-free rollover from a retirement plan to an IRA was to facilitate portability of pensions. Conf. Rept. 93-1280 (1974), 1974-3 C.B. 415, 502; H. Rept. 93-807 (1974), 1974-3 C.B. (Supp.) 236, 265. The purpose of the IRA-to-IRA transfers was to permit flexibility with respect to the investment of an IRA. H. Rept. 93-807, supra, 1974-3 C.B. (Supp.) at 374; S. Rept. 93-383 (1973), 1974-3 C.B. (Supp.) 80, 214. With respect to rollovers, the legislative history repeatedly speaks in terms of “this same money or property” and “the same amount of money (or the same property)”, both for distributions from an IRA and from a qualified plan. H. Rept. 93-807, supra, 1974-3 C.B. (Supp.) at 374-375; Conf. Rept. 93-1280, supra, 1974-3 C.B. at 502. [Treasury Regulation § 1.408-4(b)], describing rollovers from IRA to IRA, uses the language “if the entire amount received (including the same amount of money and any other property) is paid into an” IRA.

Based on the language of the statutory provisions and the legislative history of those provisions, we hold that petitioner’s use of the [cash] distributions from his Keogh and IRA’s [sic] to purchase stock which he then contributed to the Smith Barney IRA does not constitute a tax-free rollover contribution under section 402(c) or 408(d)(3), respectively.

Lemishow, 110 T.C. at 113 (footnotes omitted).

Section 402, however, is distinct from section 408 in that Congress enacted a limited exception to the “same property” rule in the Revenue Act of 1978, Pub. L. No. 95-600, §157(f)(1), 92 Stat. 2763, 2806-07. Thus, section 402(c)(6) allows for property to be sold and the proceeds to be contributed to an IRA in a tax-free rollover, whereas there is no similar exception for IRAs governed by section 408. Congress enacted section 402(c)(6) as a means to address a perceived hardship for those taxpayers attempting to roll over investments from section 401 qualified plans but having difficulty finding a trustee willing to accept property in kind. See Staff of J. Comm. on Tax’n, 95th Cong., General Explanation of the Revenue Act of 1978, JCS-7-79, at 110 (J. Comm. Print 1979). However, Congress did not enact an analogous provision for IRAs. We are unsure why Congress sought to alleviate this hardship for section 401 qualified plans without making a parallel fix for IRAs. However, our job is to apply the terms of statutes, not revise or update them. United Therapeutics Corp. v. Commissioner, No. 10210-21, 160 T.C., slip op. at 26 (May 17, 2023) (citing Wis. Cent. Ltd. v. United States, 138 S. Ct. 2067, 2074 (2018)). And when Congress includes certain language in one provision but omits it in another, we presume that the inclusion and exclusion are intentional. See Loughrin v. United States, 573 U.S. 351, 358 (2014) (“We have often noted that when ‘Congress includes particular language in one section of a statute but omits it in another’ — let alone in the very next provision — this Court ‘presume[s]’ that Congress intended a difference in meaning.” (quoting Russello v. United States, 464 U.S. 16, 23 (1983))); see also Henson v. Santander Consumer USA Inc., 582 U.S. 79, 85-86 (2017) (same).

The text of section 408(d)(3)(A)(i), the legislative history behind section 408(d)(3), our caselaw, and the regulations all make clear that Mr. Caan was required to contribute the P&A Interest, not cash, to the Merrill Lynch IRA in order to preserve its tax-deferred status. Because he did not do so, we hold that the cash proceeds from the liquidation of the P&A Interest were not contributed in a manner that would qualify as a nontaxable rollover contribution under section 408(d)(3)(A)(i).[14]

Should the IRS Have Granted Late Rollover Relief?

And now we turn to the Court’s review of the IRS denial of relief—and, as noted, this does not turn out well for the taxpayer.

As we explained above, the IRS declined to issue a waiver under section 408(d)(3)(I) because Mr. Caan liquidated the P&A Interest after the distribution from UBS and, in so doing, ran afoul of the same property requirement, see I.R.C. §408(d)(3)(A)(i); Lemishow, 110 T.C. at 113, which the IRS cannot waive. We hold that denying a waiver on that basis is not an abuse of discretion. It cannot be an abuse of discretion for the IRS to deny a waiver where granting the waiver would not have helped the taxpayer in any way.[15]

The Tax Court firmly contended that while the estate's plea for relief on the grounds of equity may have merit, it is beyond the Court's purview to grant such requests. The Court's decisions are bound by the confines of the law, and they do not possess the discretion to offer equitable remedies in cases where the law does not explicitly allow for them:

The Estate urges us to adopt an equitable resolution to this case. Although we are sympathetic to the Estate's situation, we are not a court of equity, and we cannot ignore the statutory law to achieve an equitable end. See Commissioner v. McCoy, 484 U.S. 3, 7 (1987); Stovall v. Commissioner, 101 T.C. 140, 149-50 (1993). This case is a quintessential example of the pitfalls of holding nontraditional, non-publicly traded assets in an IRA. Failure to follow the labyrinth of rules surrounding these assets can mean forfeiting their tax-advantaged status.[16]

[1] Estate of Caan v. Commissioner, 161 T.C. No. 6, October 18, 2023, https://www.taxnotes.com/research/federal/court-documents/court-opinions-and-orders/actor-received-taxable-distribution-from-ira-tax-court-says/7hgtg (retrieved October 21, 2023

[2] Estate of Caan v. Commissioner, 161 T.C. No. 6, October 18, 2023

[3] Estate of Caan v. Commissioner, 161 T.C. No. 6, October 18, 2023

[4] Estate of Caan v. Commissioner, 161 T.C. No. 6, October 18, 2023

[5] Estate of Caan v. Commissioner, 161 T.C. No. 6, October 18, 2023

[6] Estate of Caan v. Commissioner, 161 T.C. No. 6, October 18, 2023

[7] Estate of Caan v. Commissioner, 161 T.C. No. 6, October 18, 2023

[8] Estate of Caan v. Commissioner, 161 T.C. No. 6, October 18, 2023

[9] Estate of Caan v. Commissioner, 161 T.C. No. 6, October 18, 2023

[10] Estate of Caan v. Commissioner, 161 T.C. No. 6, October 18, 2023

[11] Estate of Caan v. Commissioner, 161 T.C. No. 6, October 18, 2023

[12] Estate of Caan v. Commissioner, 161 T.C. No. 6, October 18, 2023

[13] Estate of Caan v. Commissioner, 161 T.C. No. 6, October 18, 2023

[14] Estate of Caan v. Commissioner, 161 T.C. No. 6, October 18, 2023

[15] Estate of Caan v. Commissioner, 161 T.C. No. 6, October 18, 2023

[16] Estate of Caan v. Commissioner, 161 T.C. No. 6, October 18, 2023