Venable counsel Elizabeth R. Glasgow was interviewed in a June 16, 2015 Tax Analysts article on the IRS' decision to no longer issue letter rulings on whether assets in a grantor trust will receive a section 1014 basis adjustment following the death of the owner.
The move "suggests that the IRS is solidifying its position on this issue," said Glasgow. She added that an emailed chief counsel advice (CCA), "the IRS previously concluded that assets in a grantor trust do not receive a step-up in basis at the grantor's death… A prohibition on private letter rulings may be a precursor to releasing stronger guidance with more authority than the chief counsel advice."
Glasgow said that "despite the CCA, much uncertainty still remains, not only because of the lack of authority of CCAs in general, but also because the CCA in question, which is brief, did not fully address the legal arguments and interpretations that would support the position that assets in a grantor trust should receive a section 1014 basis adjustment. The perception seemed to be that the CCA was a cursory response from the IRS on an issue that required more analysis. That analysis may be a project that the IRS is putting into the pipeline."