HomeMy WebLinkAbout11-10-09---,
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Rober? R. Church- Laquire
Attorneti LD. =+ -ICI>8
keefer Wood Allen &: Rahal, LLP
11) ~~ a~Illll Stl'ect
P.U. (_~Oy i 190
I iarrihurg. PA 1 ~ 1 )x-t 9F
~tlorr:,~w for Petitit~ncrs
i'~ (flf- ~IAT7~E1Z t)F THE
FS1;~ hf~ OF ~~1-SKY E. BURDGE.
IaECi-ABED
IN THIS COURT OF C'0~~~1C)N P?.(:.-~,`~
CUMBERLAND COl~'~ 1'~'.
PENNSYLVANIA
IN ORPHANS' COi_!RT L>1VISION
No. 2008-00305
PETITION UDDER SECTION 9188(x) OF THE
[NHF,RITANCE AND ESTATE TAX ACT OF 1991, 72 P.S. § 9188(a-,
<~PPF.AL OF PF,NNS~'LVANIA INHERITANCE TAX llETER!Y1I~A"I1O1
~\D tiO1~~_ thls ~~_~_~;, da}' of _ __ ~~' ~ , 2009, come the undersigned Petitii~ner>.
h~~ ar,ri throu~~h their legal counsel. K~,efer Wood Allen & Raha1, LLP, and resp~.~~tf-ullti~ }~ctiiic7n
this Court for a reds eI-Inination of Pennsylvania inheritance tax. as follows:
"~3~trti I~;. Burdge, a widow- (the "Decedent"), late of CumL~erland ~_~~>tnt~~.
Penn~~~.l~~ania. died testate on March 14. ?008. The Decedent's co-executors (dc~<~ribed bcl~~~~
a''e ti'.t Pctltloncl'~ heTelll.
'. C)n ~pri'. 8. ?008. the iegister of Wills ot~ Cumberland County . l~t~:ns~l~ al,~itt ;! i~i~~
'~(Zc<~~~tt~r"~, issued i.etters 7~estamentar~ to the Decedent's son Randall D. Burd~:e ~fnd
,.
'~1an~~.acturers a~~c{ Traders l~rust Company as co-executors Icollectivel}%. the "~';°t;tioner~) of ti~~~
~~rohat~~ estate of ylarv ~;. Burd~re, deceased (the "Estate"~1.
~. On ,dune 12. 2009 the Petitioners filed with the Register the Dec~~t+.tnt's
1'enn~~~lvania inheritance tax return (Dorm REV-1500), under timely extension. ~~~; rcE~c~rttd
ti~ere..~~1. the Petiti~~~ners claimed a refund of $173.00 for overpayment of Penns I~ anla ir:hcrit~n,t~,'
tt~x ~~a'~ci pre~iur;~l.,.
~. 117t~ PetltlonCCS Kaye made the following payments of~ inhecitanc _~ a~
?a~~me~at Da:~~ I~escripti~~n ~n~t~u ~t Paid
I~.ule 11. ~'OI~R Estimated Tax Pre-Payment S 9l ~' ~~i_)U
lEU1e 1 1. `~OUh Inheritance ~hax Discount ~; :~.~; }~,~.{it)
L:~ecembe~- 1 '_ ?008 Inheritance Tax Payment With _j i~U t~t~(.i~U
Extension Request
1Ol~~~L 51 ~t~.i +~l).U(?
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~>~~ "~eptember ? 1.2009 the Pennsyl~~ania Department of Reyenu.~ ~ t.h~~
:~1Zu,~~~~~;;denz") ss~t;cd a Notice of i~ppraise;nent (the "~ppraisement") by ~~hich ~_: f~e~h<~ndent
d~nic the Petiti~~n~rs' claimed refund of X173.00 and also assessed an additiun._~i ~~~tiiianc~~ due ~.~
S ~?.~.`2.00 fo~~ additional Pennsylvania inheritance tax and interest/penalty. 1h~.~r.,j~~>ri the tut.;l
a°,~ot;7,t in disp~itc ,~ `ti3 ~.72~.00.
t~. The only issue in dispute is the appropriate valuation of the Dec~~d~nt'~ <>?. ~" ~~
limitt~.. ~~artnersl~i~ interest (the "Interest"'l in Burdge N1oKan Partners. I..P.. a ~1 ~~,t~t;rz li~nit~:~,i
~,:u~t~i~:~a1i;~ +thc (~'~~rtnership")
1t~iiched to the Decedent's tiled Pennsylvania inheritance tax ~c°_t.rn ~~,a~ «~
appt~n~,a1 of the Partnership, as of March 14. 200$. the date of the Decedent's d.°a~_i: the
\p; raisa,~' ~. :~he ~\ppraisal was prepared by Gletvl K. Spinello. CP,~~%ABI~_ +.' `~ ~,, ~~~y1:A.:~~~ :_h~.:
acc~~~;.;~ltin~~ firm ot~ I3~ard Miller Company LLP ("BMC")
8. t~c, preserve the confidentiality of the Decedent's financial inh~r;n,~tion. nu co~;rs
c 1 thw :~~ppraisal h:~ve been attached hereto. The Petitioners intend to make tho,,c ~:~~ntidLutiai
;~~at~~r als ayailabl~~ tc~ the Court. in due course. together ~~ith a request that th~~ ~_~~~~ii~~lcn~.ialit~
t;er~~~f be mai,~tai~ied in the. Cotu-t's records. by the sealing thereof. Copies ul~ h,~~c nlatcrial~ ,_+~c
,~?re~;~:l in the p~~s~cssion of the Respondent. because they were attached to the ':'t~r:;ts~lyanitit
initcri~~~mce tax retu;-n.
9. ~l~h~ Partnership was established in August 2004 by the Decedent u~d hc- three
>~~n~_ Randall. ~er:~mv and Gavin Burdge, to provide a centralized entity l~~r the ~;,;tluisitic~n ar~,i
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numa~~~u~ent ofti,~ !am}Iv~s real estate and other investments. The Partnersllip~~ .~.:~nera~ partner
~; E3~<r~i~~e ''tiT~~h_1n ~1ana~~ement. L.C.. a Missouri limited liabilin~ compan~~ o~~ n.~~ 1~: t};~~
Decc~hrt~s three ;ails. equally.
l t). Ovr~r ~i period of scver~a ~~ears before the Decedents death in '~1~; t~~! ,Uti~;. the
P?rt~;~~ s~,lip ac~au.r~°ti ;najorit~ owners=iip positions in three commercial real pr~,~~~ ,_;~~~ in
L~is~t~~:r~1~.an~,as~ ~'~-~~irie Springs II1veStmtntS. L.C.. Prestige Plaza Investments i..t~~.. and yla}~i~~
(~re~~ ;~~~, estment~;, i .('.. all of which are more particularly described in the .~hp~a sa;. To
m~a~.~~i:~e liahiiit~,~ prt~~tection, each of these real estate investments was or~~anii.~~d a~ a ~~r~arat~•
lia~it~°~~ liability ~o~npany; the other investors in these entities were other family t~ _~~t> E~r.~ s~~us~,
estab,i~~i~ed b~~ tl~e Decedent or her late husband. These real estate investments ;~~~u~rcd actr~~~
irant~_~ument and c, ~mprised 39.2% oi~ the Partnership's assets per the .Appraisal ' i74
1'_irur._~~ship~~ ~~thei assets ~~ere cash aad marketable securities.
1. I i-ie fespondent did nr~t obtain an}~ professional appraisal of the ;'_i _r,c,-~lliY~. _i~~~r~
heal~~ . t~~e Dcpaz~tmcnt of Revenue emplo}ee who valued the Partnership 1~~r th~~ Kt~~ponden~.
a~cc;-~~t,~ci I3tiI(~~~; a~~~regate valuation of the Partnership. However. the PetitionE°r-~ a~~:d the
hesp~>>;~lent disc ;r:e ~~~cr the appropriate ~~aluation discounts that should h~ ap;~~~ ~~i t~~ ~~~:~t~~u~t
fi>r the f'artnership~; lack of marketabilit~~ as a closely-held entity and also +.~or t.~~ t:_i~~? that the
Iuter~ ~~t ~,~a> lin~tc.i partnership units Lacking any voting power or mana~~cmera ~ ~ ~s~t~.
!?. (>> tl,e ~~ppraisement the Respondent denied all minority ~disco<<r°~ ~~.rd
n~arh~~~abikit~ di~~c~~~_mts as'~not allo~~.~d ~~~hen a family partnership dots not oper,i~~~ a le~~iim~.~.~~
-~I-
h~c~ii:_°~~~ inter=.~~-;;~ 1(eld: Orphans t_'ourt of Vanango Counter agreed and Con.~~ ~ t~~«~~~ltt~
Ct~~n ~ .f~1 irmcd. ~3~~rr~ Estate 27 Fidut:. Rep. ?d ? 19...
_~, I'et.i~ioners belie~~e. and therefore a~~er. that the facts of this case <,~~:.r,ateriall~
di~i~er.r_ algid dist~r ~~3ishable from Berr~~ Estate. 27 I~id. Rep. ~"`~ X19 (Pa. Conu~ ~ _ . ~'~ ~)?~
h_ca_,~~ in I3err~ F:~tate the decedent ~_>wned both the general and limited part~ie~,.~i;~ intc~.~>!.~ _, ~~~
t}i; p~i~tnershi~~ ~~or~~isted solely of marketable securities.
.~. ~~~z~on 9188(a) of the Inheritance and Estate Tax Act of ly~)1. ~' ~:' ~~- ~~>1 ~~~i,__!
pro~~,~.:~~ that and h,irt~ dissatisfied ~~ith the Respondent's determination ui~ I'en~,~~.~~.u~a
;nh~,~ ~a~~ce 'a~ nia~ appeal to the app~~icable Orphans' Court Division ~~~ithin sip t~. ~t~ii~ ~a~ ti ~r~l.~~
~i;~ ~:..-pint ~~1~ i1~~ti<:~ of~the entry of the decision of the Department of IZeyenuc~, he 'ti~~t~c~ ~>±
',ppt.~~~ement. i-l-~~.~efore, this Court has jurisdiction to determine the Decedcn~~'- .<~rre~t
i'enr~~. "lyania i~zhe~ itance tax liabilit~~refund. as requested abo~~e.
J ~ Sec~ion 9183(a) of thr Inheritance and Estate Tax Act of~ lt>t)I ~~~~.i~~t,°~i a}~~~~.~ ~~:;~
}-~-~,< <i;s that tll~~ C~~G~rt mati~ direct the Respondent. i.e.. the Department of Rco._~t~ :_~~. ;~~ tr~u~si~,i~
t~~e ~r.ire record ,~~' inheritance tax determmat~oni to the Court, and that the ~~~ ~,r[ ~ ~a~i cit ~c
~-~roc~' x: to a det~r~~~:mation of the issi.ies protested or suspend such determinati~•1 ~_m~.~ ti3<~ a~i,j<_
~~f 111: :iCC~?nnt ~~i'~lc' perSOnal reprCS~lltatl~'e.
i(=. '~clministration of the Iatate is ongoing and is not expected to h~~ ~,~r~~p~~t~d for <<~.
ica~~ l~othtr ~tar_ p4rhaps longer, because the Decedent's federal estate tai ca_~ii~ 'itia~, ~?~~! ~~~~_
i~ee,. `inall~ oetcrsnined by the Internal Keyenue Service. The Petitioners hay ~ a ,,~ ix~t yet
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dt~t~r~ i~~eci ~.~llt~'_ k~~r e~~en ~~~hethcr) the~~ v~ill file their final account for adjudic t~ ~_~ i~,, ~i~;~
(_~our~ !~or the lor~~_oing reasons. the Petitioners desire this Court to determin: i~~ i)ec~d:~~~t'~
}';ns~~,~ l;~ania Tnl.cr,tance tai liability through this Petition, rather than ti~,aitin~~ ~ n :~ `I~ a~~ ;~i~s~il
~i_~{~t:!t tifan~. ~ . ;~~~,:muall~ flied with the Court.
?. ~~,tt;~~heci to this Petiti~~~n is ~~ proposed Order to shoe- cause. for , ,t ;~,itl;~r_ai.~n l~,
t?~~~ (; a='t. i~i~c 'e~.~.Tiuners suggest to the Court that such Order be made: iet,.u~n,1~ ,= i~,, ,~;~,~~
~__~~.~~, ~l~lent t~iti.ir: ~r;~e hundred t~~en~~y (1~0) days i~rom the date of its issuan~c i, ;a~L• C~~~ur~. ;,
,,~~d~„ ~~ a11t~~~~ c~.~lir;~~~~1 for the Petitioners and counsel for the Respondent tt~ ri; ~~ ..lnd I~~,l~l
~.'TT~~I:h'Ilt 1~~`~~O?]d~_!{1J1S Of th15 T11attCl'. if t~IOS~ SEath'mEnt n~gOtlatlC)nS Eire' E_Itl~i~:,~'~~~~UI ~llthl;l
~ucl~, ,~e~ic~d. tn~n ~},c Respondent woi.~ld be required to make a formal respon~,c ~~ :?;~ OPC~i s~~.
;~ ,~i a_z~r uoul~l thereafter proceed to a hearing by the Court, as the Court dire~~~~
l1~`I1}~ZFk~~ ~[~(: the Petitioners respectfull~~ reduest this honorable Ct~~u ; ~_ ~,~,,~~ ti;~:
1[~i~. '~~.~ ~ 1r.~Ci' ~~. -(l~ ~l~ Caitsc. ~h~lth Il1e sa~l]e t0 be ret~li'llable ~blthlll one hlll7~}1'.'~; ' ,i c'nt'~ { '~, ~~ i ;
<i_.~ ~ , - o~1~er~~.~,t _~~ the Court deter~nine~. and thereafter to confirm that the P ~~ t:,_.r~le ~ ~; ur~~
filet` ~ ~ th ~":'tfin,' l~f PennsC-'It'anla 1'ilherlTanCe Ta\ m the amOLlnt Of X173.{)~?. ~_) e?2~'1' iiT}Z
.:pp ~ able interes~~ ?hereon at die stat~.itorti rate. as dell as such other relief a~ tl~ ~tu~t >hull
aet~~~~s~rne ~ip,r~~>p Mate in the circumstances.
_{;_
Respectfiull} Submitted.
B~
Robert R. Church
~ttorne~ LD. ~ -I0 ~,
Keefer ~~'ood Allen ~ R<i~.:_' _1 1''
210 ti~'alnut Street
P.O. I3ox 1 196
Harrisburg. PA 171 rJK- i ~~t;_
(7I7 i ?~~~-80>9
Counsel for Randall h- [~~,u.~- ,~n~_i
Man~ifacturers and ~l~ra~icl~ " (~:_~n-~~an~-
Co-Lrecutors of-the I,~tat~ ~~r~, ; .
13urd~.~e- decLased- I'etit~~~i~~ ~_
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1`. I .i.~ l~l_'~I'~l1_i~ ' ~, i~ljl l~; ~l~lli: COL,RC O1 i~tj`,~~~,;~~`~ i'~ '~ ,`,`
I~ < t?1 '~' ~% ~"~~ ! 13[ I<I)G!=. ~ C'11MI3F~Rl.:1'~U CO! ~~
i';~i ~~~.i~ PFN\S~'L.~'.~~\l:'~
III ORPH~INS~ CU1_R I ~ _ -, !ti~I.',~
No. ?O08-0030
VERIFICA"TIO
!~~h_ _~I,~i~r~i~~~~d_ Kandall ll. i3urd~~. Co-E~ec~~ac~r. herei~ti ~~~rities _ul~ ~ ~._~ ti .~,~.
t?,_ ~: C~u-I~~ecutor o°.~the Estate ~~` Mari E. l3lu-d~e. de~~case~i:
[~, ~~~~i1 liduciarv capa~..ity he is authorized to make this Verl~,ic I~_ ~,. !.~r :~t
,_ur~-~>~<< ~ <;~~r~s,t~_~ i;I the Petition:
i 1-~ ~~ICt~ set forth in t(~e loregoin~~ Petition arc true and ~.orr~t ~ ~ ~~,,
i,~,~~ v~_1"~~-_ ;rLc~ ~i~i_It~on. and beliet~. and
~ (i~' ; :~<<-a1'e that lake ~tate(11E;11tS hel~eln al'e I11~1dC SUh~eCl[ tt7 t~1t' i-UU~ jt~i'
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RatillAL1. L).131~IZU~ii .-~0.~~~s_tit~r
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1~. ~~~, ~ ~~ ~ ~ ~ ~~ f; ~ ~f rf-if : fti~ rHr: c~~t ~f~ r c~~~ c t) ~,' t.;t ~~~ ~~ ~,~
i~`~f ~ (sI ~L~, `~~~ i~:. R[_'RI)C;F~.. CIi:V113}.RI :~`~[~ Ct>t '~ .
fV OfZPlf ~1"vS~ COf f; ~ ~i~ ~~.
Vic. ?OO8-~JU3(J
VERIFICA CIO
?~t° un.~~ ~ !~~~c.. Jo~cph :~,'~".acri. Vice President and Trust Ufl~cer. h~.~ ~, ~;. i _; .,,~.
i. ~~ <, b~ice President and Trust Officer of Manufacturers a~l~l I _, .~r; i ~°~~~~i
t ,1;~1 -.~,. ('~~~-(.:~ ~,..a.~r +_~f the >_~statc ~ ~f M<ir~ ~. Bln~d~rc:. deceased:
- ? ±:~ authorized tc~ i~~ahc this Vc:riticati~n on behalf of Malluf_1~.~~ .~ _ ~1,,I ~~a~'~,.r~,
i,_ ~~t~ >et ~~orth in the. for: <~c~in~ l'etitio~~ are true and rc~rr~~~. '. '~ i,-':
,,,~a~ ~.i:~~~ arn. befi~,.1: and
f ; :: ~ ati~ arc ghat false ~tatei7~ents herein are made subject t~> i.h~ j-. ~ .~_~ ~~ i r,?~
~~rjt ~ ~~ursuan? ~~~ ' ~ Pa. C . S. ~ X90 ~.
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`Trust Of~ticer
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C'i~~IB1:RL.x~~I) Ct )?
\0.21)08-{)0l)~
C~~:R~9 IhI~.: ~~(~F, i)F SERti ICF, RE: PETITION t tiDER SI~:~ ~I'I~~~~ 'x18~~<~;
(~F "i~9II: ['vIII~:RIT~1tiC(~: a~U I~ ST:~TE 1'A~ .ACT OF 1991, ?'_ 1'.°~, ~, ~-i!~!~(;i).
1l'Pl~::1L t)F PE11'Sl"1.~".~NI:~ INHERIT_~~CI~~ T_~Y llETEIZti~tI~~_1l~ty~
[. ;L ~r~.•:~: r' ~'h~n-cli_ Esquire cou~isel Ior the Petitioner. hereb~~ certii~ ~. ? ~,~r,~~~i t~:~.~
~~~C" _ ~C~ i,~~,' ' ~~iL~21+)ll lll tIZIS mati;r ll~"»Il the R~spondent'S COlLllsel lhi~ CI2'.1_ -l~~t~~~€ill~C
~~~~ ~:_u ~ c ~rr~~+,- ~.~ ~~~ ~~fthe same in '.he united States mail. fiat-class mtiil.,r r~3~.~~:~1~_I.
ait~~:_>-~~i <<~ I ~(t
Office of ti.'hie'~. Counsel
Attn: her.neth D. Henderson. Depute Chief C.uar~,~
k'enn,~~l~~<<nia Department of Rc~enuc
k'.U. l~uy '_8 i (~ii 1
Ilarrisbur<t, P `~, 1?128-1061
)~i' . ~'. . 2000 ~~
Robert R. ChurcL. ? , : ~ ~~~