The student must read the Revenue Ruling carefully and may need to look up unfamiliar terms or concepts. Additionally, reading the cases cited within the ruling and other authorities or editorial material before writing the essay is beneficial.
The IRS analyzed seven (7) independent situations related to Buy-Sell agreements. The essay should address the following questions:
1. What is a buy-sell agreement?
2. Why are buy-sell agreements important for closely held corporations?
3. What is the issue addressed in the seven situations?
4. What was at stake for the taxpayer (shareholders) in these situations?
5. Summarize the IRS position on the tax treatment in the seven situations?
6. What Judicial Doctrine or Doctrines did the IRS use to justify its rulings?
7. Did the IRS cite relevant cases? Explain.
8. As a tax consultant assisting a client with a buy-sell agreement what advice would you give your client?