Earl A. Brown, Jr. And Betty Galt Brown v. United States of America, Earl A. Brown, Jr., Independent of the Estate of Earl A. Brown v. United States of America, Earl A. Brown, Jr., Independent of the Estate of Ellen Augusta Brown v. United States of America, Susan Brown Barry, Guardian of Brice Galt Barry v. United States of America, Susan Brown Barry, Guardian of Andrew Earl Barry v. United States of America, Susan Brown Barry v. United States

Appellants, Earl A. Brown Jr. and his wife Betty Galt Brown,1 are seeking a refund of federal income taxes, interest, and penalties for the taxable years 1977 through 1982. They appeal from the district court's summary judgment in favor of the Government. We AFFIRM the judgment.

In 1968, Ellen Augusta Brown died, leaving a will that provided, in pertinent part:

I give, devise and bequeath unto my husband, Earl A. Brown, as Trustee, all of the property, real, personal and mixed, wheresoever situated, which I may own at the time of my death, upon the following terms, conditions, and directions:

(1) This trust is created for the benefit of my son, Earl A. Brown, Jr., and his lineal descendants, and shall extend and be in force until the death of the Trustee. Upon the death of the Trustee, Earl A. Brown, all of the trust property then remaining shall go to my son, Earl A. Brown, Jr., if he is living, subject to the conditions and provisions hereinafter set forth.... Upon the death of Earl A. Brown [Sr.] this trust shall terminate....

* * *

In the event Earl A. Brown, Jr. survives his father, Earl A. Brown, and receives the trust property mentioned above, I give unto the said Susan Brown Barry all of the said trust property remaining in his hands at the time of his death. In this behalf I would direct my son, Earl A. Brown, Jr., during his lifetime, to use all the income from said property for his own personal use, in any manner he may see fit; and to sell and convey any part of the corpus of said estate and reinvest the proceeds thereof in such other assets and securities, except real estate, that he may regard as being for the best interest of the trust estate and its preservation. Also, I would direct the said Earl A. Brown, Jr. to sell and dispose of a portion of the corpus of my estate and personally use the proceeds thereof only if such sale is required to satisfy his personal needs and necessities; but it is my hope and request that he keep intact as much as possible of the said trust property which comes into his hands, both real and personal, to pass on to and become vested in our beloved granddaughter, Susan Brown Barry, upon his death.

Earl A. Brown Sr. died in 1969. In addition to setting out several specific bequests, his will provided:

All of the rest, residue and remainder of my estate, real, personal and mixed, I give, devise and bequeath unto my son, Earl A. Brown, Jr., to be his property. I do this, however, in the knowledge and belief that he will use such portions of the said assets, whenever, in his opinion, it may be necessary or desirable to meet the needs of my beloved granddaughter, Susan Brown Barry, and her lineal descendants. Upon the death of the said Earl A. Brown, Jr. it is my wish that any of said property remaining in his hands shall go to Susan Brown Barry, if she be living, and if she be not living, then to her lineal descendant or descendants, share and share alike.

Appellant Earl A. Brown Jr. ("Brown") was named independent executor of his parents' estates (the "Estates"). By July 1971, the formal steps of independent administration were complete: The wills had been admitted to probate; the probate court had approved the inventory and appraisement lists of the Estates' assets, finding in each case that no debts or claims were outstanding; federal estate taxes and Texas inheritance taxes had been paid. To date, however, Brown has not closed either estate.

In 1981, the Internal Revenue Service ("IRS") audited the tax returns filed by Brown on behalf of the Estates and determined that administration had been unduly prolonged and that the Estates had terminated for federal income tax purposes as of December 31, 1976.2 Consequently, taxable income previously reported by the Estates was assessed against Brown as beneficiary under the wills.

In February 1982, the IRS sent appellants Earl and Betty Brown ("Taxpayers") a notice of deficiency for the years 1977 and 1978.3 Shortly after receiving this notice, Brown requested, and received, authorization from a Texas probate court to continue the administration of his parents' Estates. Taxpayers paid the assessed deficiencies and filed administrative claims for refunds with the IRS. The IRS denied their claims. Taxpayers then filed a complaint in federal district court seeking--ultimately--a refund of $698,946.50 plus costs.4 Taxpayers claimed that the IRS improperly deemed the Estates terminated and thus incorrectly attributed the Estates' income to Brown.

Both sides moved for summary judgment. On July 15, 1985, the district court denied the motions. Both sides then filed motions for reconsideration, supported by numerous briefs. After a hearing on all pending motions, the district court determined that reconsideration was appropriate.

On December 10, 1987, the district court granted partial summary judgment for the United States. The court held that the IRS had properly considered the Estates terminated for federal income tax purposes. Taxpayers' motion for partial summary judgment was denied. After the parties settled the remaining non-estate issues, and stipulated as to tax adjustments resulting from such settlement, the court entered a final judgment. Taxpayers timely appealed.

We have distilled Taxpayers' numerous arguments on appeal to a few central issues. Taxpayers assert that the district court erred by: (1) failing to follow the binding precedent of a prior Fifth Circuit opinion and thus to defer to the Texas probate court's order that the Estates could remain open at the discretion of Brown; (2) upholding the IRS's determination that the Estates had been unduly prolonged; (3) upholding the IRS's assessment of the Estates' income tax against Brown, since the court made no clear determination as to what interest he received under the wills of his parents; and (4) not granting Taxpayers' motion for summary judgment on the grounds of equitable and "actual" estoppel.

We review a district court's grant of summary judgment by evaluating the record under the same guidelines as were used by the district court. Summary judgment is proper if it appears from pleadings, depositions, admissions, and affidavits, considered in a light most favorable to the nonmovant, that "there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c); Galindo v. Precision American Corp., 754 F.2d 1212, 1216 (5th Cir.1985). Only disputes over facts that might affect the outcome of the case preclude the entry of summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986).

We first note the burden of persuasion borne by the parties in this case. An IRS deficiency notice is clothed with a "presumption of correctness." United States v. Janis, 428 U.S. 433, 441, 96 S.Ct. 3021, 3026, 49 L.Ed.2d 1046 (1976). In a refund suit, the taxpayer bears the burden of proving both the error in the assessment and the amount of refund to which he is entitled. Id.; Mallette Bros. Constr. Co. v. United States, 695 F.2d 145, 148-49 (5th Cir.), cert. denied, 464 U.S. 935, 104 S.Ct. 341, 78 L.Ed.2d 309 (1983).

The underlying facts that we find controlling in this case are undisputed. "When everything that can be adduced at trial is before the judge ... and the parties, while urging conflicting ultimate facts or conclusions, have no evidentiary disputes, a trial serves no useful purpose." Fontenot v. Upjohn Co., 780 F.2d 1190, 1197 (5th Cir.1986). Our appellate role in this case, therefore, is to review de novo the legal conclusions of the district court.5 After a careful review of the record and the relevant authorities, we concur with the district court's determination that the United States is entitled to judgment as a matter of law.

A. 26 U.S.C. Sec. 641(a)(3) and Treasury Regulation Sec. 1.641(b)-3(a)

Subchapter J of the Internal Revenue Code of 1954 (the "Code") sets forth the statutory framework for the federal taxation of estates and trusts. Under Subchapter J, the income earned by an estate or trust is taxed only once, either against the estate or trust, as a separate tax entity, or against the beneficiaries, as to the income that is distributed or is deemed distributed. Section 641 provides that the taxable income of a decedent's estate shall be computed in the same manner as the taxable income of an individual, except as otherwise prescribed in Part I of Subchapter J. 26 U.S.C. Sec. 641(b).

We are concerned in this case with the application of section 641(a)(3), which imposes a federal tax on

the taxable income of estates or of any kind of property held in trust, including--

(3) income received by estates of deceased persons during the period of administration or settlement of the estate.

26 U.S.C. Sec. 641(a)(3). The pivotal issue for Taxpayers is the meaning of the term "period of administration." Congress has never provided a statutory definition for this term; therefore, the IRS has long interpreted the broad language of section 641(a)(3) in its regulations. The Treasury Regulations promulgated under the 1939 Internal Revenue Code, interpreting the same statutory language,6 provided that the period of administration is the time actually required by the executor or administrator to perform the ordinary duties pertaining to administration, "whether longer or shorter than the period specified in the local statute for the settlement of estates." Treas. Reg. Sec. 19.162-1 (1940).7

In 1956, the IRS promulgated new regulations under the 1954 Code. The IRS reissued the above-quoted regulation--renumbered to correspond to the 1954 Code--incorporating the substance of the former version, but clarifying the meaning of "period of administration."8 Two pertinent sentences were added:

However, the period of administration of an estate cannot be unduly prolonged. If the administration of an estate is unreasonably prolonged, the estate is considered terminated for Federal income tax purposes after the expiration of a reasonable period for the performance by the executor of all the duties of administration.

Treas. Reg. Sec. 1.641(b)-3(a) (1956).

Under the plain language of the amended regulation, the Commissioner has authority to determine whether an estate's administration has been "unduly prolonged" and to deem the estate closed for federal income tax purposes once a reasonable time has elapsed for the administrator to have performed all the ordinary duties of administration. Taxpayers disagree with this interpretation of section 641(a)(3), citing as support our prior decision in Frederich v. Commissioner, 145 F.2d 796 (5th Cir.1944), a case decided under the 1939 Internal Revenue Code and the former version of Treasury Regulation Sec. 1.641(b)-3(a). They contend that we must interpret the statutory term "period of administration," purportedly as did the Frederich court under the facts of that case, to mean the period that an administrator actually consumes before closing the estate, regardless of a determination by the Commissioner that a reasonable time has passed for the estate's termination. Taxpayers also argue that, in any event, a 1982 Texas probate court order, authorizing Brown to continue administration of the Estates at his discretion, was conclusive on the issue of whether the period of administration had terminated under section 641(a)(3), again citing Frederich as authority.

We construe Taxpayers' arguments as a challenge to the validity of Treasury Regulation Sec. 1.641(b)-3(a) and an invocation of the "law of the circuit" rule, under which one Fifth Circuit panel may not overrule the decision, right or wrong, of a prior panel. The Government, in turn, contends that the regulation is a valid and reasonable interpretation of section 641(a)(3), and that Frederich is no longer good law in this or any other circuit. The Government also asserts that under the teaching of Commissioner v. Estate of Bosch, 387 U.S. 456, 87 S.Ct. 1776, 18 L.Ed.2d 886 (1967), a lower state court ruling cannot be controlling in a federal tax dispute; therefore, the IRS and the district court acted properly in conducting an independent review of whether the Estates had terminated for federal income tax purposes.

The IRS promulgated Treasury Regulation Sec. 1.641(b)-3(a) under the general authority granted by Congress to the Treasury Department to "prescribe all needful rules and regulations" for the interpretation and enforcement of the Code. 26 U.S.C. Sec. 7805(a). The congressional delegation of authority found in section 7805 helps avoid "the wasteful litigation and continuing uncertainty that would inevitably accompany any purely case-by-case approach" to application of the Code, United States v. Correll, 389 U.S. 299, 302, 88 S.Ct. 445, 447, 19 L.Ed.2d 537 (1967), and helps ensure that rules and regulations "will be written by 'masters of the subject,' who will be responsible for putting the rules into effect," National Muffler Dealers Ass'n v. United States, 440 U.S. 472, 477, 99 S.Ct. 1304, 1307, 59 L.Ed.2d 519 (1979).

As pointed out by Taxpayers, such an "interpretive regulation" is entitled to somewhat less judicial deference than a "legislative regulation," issued under a specific grant of authority in the Code to define a particular statutory term or to prescribe a method of executing a statutory provision. Rowan Cos. v. United States, 452 U.S. 247, 253, 101 S.Ct. 2288, 2292, 68 L.Ed.2d 814 (1981). Nonetheless, an interpretive regulation is "entitled to substantial weight." Lykes v. United States, 343 U.S. 118, 127, 72 S.Ct. 585, 590, 96 L.Ed. 791 (1952). "[I]t is fundamental, of course, that as 'contemporaneous constructions by those charged with administration of' the Code, the Regulations 'must be sustained unless unreasonable and plainly inconsistent with the revenue statutes,' and 'should not be overruled except for weighty reasons.' " Bingler v. Johnson, 394 U.S. 741, 749-50, 89 S.Ct. 1439, 1444-45, 22 L.Ed.2d 695 (1969). Upholding the validity of an IRS interpretive rule in Correll, the Supreme Court stated:

[W]e do not sit as a committee of revision to perfect the administration of the tax laws. Congress has delegated to the Commissioner, not to the courts, the task of prescribing "all needful rules and regulations for the enforcement" of the Internal Revenue Code. 26 U.S.C. Sec. 7805(a). In this area of limitless factual variations, "it is the province of Congress and the Commissioner, not the courts, to make the appropriate adjustments." The role of the judiciary in cases of this sort begins and ends with assuring that the Commissioner's regulations fall within his authority to implement the congressional mandate in some reasonable manner. Because the rule challenged here has not been shown deficient on that score, the Court of Appeals should have sustained its validity.

389 U.S. at 306-07, 88 S.Ct. at 449-50 (citation omitted).

The regulation at issue in this case represents an effort by the Commissioner to supply a needed definition, omitted by Congress, for the general term "period of administration." In National Muffler Dealers Ass'n, the Supreme Court provided a framework for reviewing the validity of an interpretive regulation such as Sec. 1.641(b)-3(a). In determining whether the regulation carries out the congressional mandate in a proper manner, several factors are important: whether the regulation comports with the language and history of the statute to which it applies, whether it is a "substantially contemporaneous construction of the statute by those presumed to have been aware of congressional intent," how long the regulation has been in effect and the reliance placed on it, the consistency of the Commissioner's interpretation and application of the regulation, and "the degree of scrutiny Congress has devoted to the regulation during subsequent re-enactments of the statute." National Muffler Dealers Ass'n, 440 U.S. at 477, 99 S.Ct. at 1307.

We must determine whether Treasury Regulation Sec. 1.641(b)-3(a), as expanded in 1956, validly vests the Commissioner with authority to deem an estate's administration terminated for purposes of taxing the estate's income to the beneficiaries, even in cases, such as this one, where administration might legally be continued under state law. The broad language of section 641(a)(3) is open to different interpretations, and the legislative history prior to the 1954 Code is unenlightening. However, in the absence of statutory language to the contrary, the Supreme Court has advised that a provision of the Internal Revenue Code should be read "so as to give a uniform application to a nationwide scheme of taxation." Burnet v. Harmel, 287 U.S. 103, 110, 53 S.Ct. 74, 77, 77 L.Ed. 199 (1932).9 Although state probate laws would, of course, be pertinent in the Commissioner's determination of what the ordinary duties of administration entailed in a particular case, the existence of an estate as a taxable entity is a question of federal, not state, law. Under the Harmel presumption, section 641(a)(3) of the Code can be fairly read to require a uniform federal standard by which the Commissioner may deem an estate closed if the reasonable period of time required to perform the ordinary administrative duties has passed, and the administrator is unduly prolonging the estate's termination.

In the committee reports accompanying the enactment of the 1954 Code, both the House and Senate Reports describe the period of administration as

the period actually required by the administrator or executor to perform the ordinary duties of administration, such as the collection of assets and the payment of debts, legacies, and bequests, whether this period is longer or shorter than the period specified under local law for the settlement of estates.

H.R.Rep. No. 1337, 83d Cong., 2d Sess., reprinted in 1954 U.S.Code Cong. & Ad.News 4017, 4331; S.Rep. No. 1622, 83d Cong., 2d Sess., reprinted in 1954 U.S.Code Cong. & Ad. News 4621, 4980-81. This language adopts the substance of the Treasury Regulation promulgated under the Internal Revenue Code of 1939 interpreting "period of administration," and thus indicates congressional endorsement of the then-existing regulation. Taxpayers do not dispute the validity of the predecessor to Treasury Regulation Sec. 1.641(b)-3(a).

As described above, the IRS added a caveat to the regulation in 1956 that emphasizes the Commissioner's authority to ascertain whether an estate's administration has been unreasonably prolonged for federal income tax purposes. Taxpayers contend that this revision "is not binding on the taxpayer or this Court." However, we find that this change does not contradict the prior regulation, apparently approved by Congress, but merely makes explicit what was formerly implicit. If Congress intended that an estate's period of administration for purposes of section 641(a)(3) of the Code should not turn on "local law for the settlement of estates," it appears to us obvious that the period must turn on a federal factual standard, as ascertained by the federal agency charged with enforcement of the Code.

This interpretation of section 641(a)(3) and its accompanying regulation, that the Commissioner is clothed with the authority to deem an estate terminated for income tax purposes if it has been unduly prolonged, has been consistently espoused by the Commissioner--both before and after the amendment to the regulation in 1956--and consistently accepted by the courts. See, e.g., Miller v. Commissioner, 39 T.C. 940, 947 (1963), aff'd, 333 F.2d 400 (8th Cir.1964); Chick v. Commissioner, 166 F.2d 337 (1st Cir.), cert. denied, 334 U.S. 845, 68 S.Ct. 1514, 92 L.Ed. 1769 (1948); Estate of Farrier, 15 T.C. 277, 281-82 (1950). Moreover, the IRS promulgated Treasury Regulation Sec. 1.641(b)-3(a) less than two years after Congress's enactment of the 1954 Code; therefore, the regulation "represents a substantially contemporaneous construction of Subchapter J's conduit principles by those with the expertise to appreciate and define the intent and purposes" of the statute. United States Trust Co. v. IRS, 803 F.2d 1363, 1370 (5th Cir.1986). The amended regulation has now been in effect for over 30 years, yet Congress has left section 641(a)(3) unchanged despite several amendments to the 1954 Code and the enactment of the Internal Revenue Code of 1986. This acquiescence strongly suggests congressional approval of the longstanding interpretation of section 641(a)(3) by the Commissioner. See Lykes, 343 U.S. at 127, 72 S.Ct. at 590.

Taxpayers' position is that "period of administration" should be read to mean the actual period an administrator keeps the estate open, irrespective of whether all ordinary duties actually required for the estate's existence have been completed except for the transfer of the estate's corpus to the legal beneficiaries. We do not believe that Congress intended a rule such as Taxpayers propose that would result both in nonuniform benefits to taxpayers and potential detriment to the Treasury.10 The increasing popularity of independent estate administrations, for example, in which an administrator operates free of court intervention and under which an estate might legally remain open indefinitely, creates the potential for prolonging an estate to achieve income-splitting and tax avoidance goals, a strategy not available to those estates administered under court supervision. The risk to the Government of lost revenues is most pronounced in cases where the estate fiduciary is also the sole or principal beneficiary of the estate's assets, a not uncommon situation.

Even if we believed Taxpayers' position to be a logical and reasonable interpretation of section 641(a)(3), a conclusion we cannot endorse, Taxpayers could not prevail on that point alone. The issue is whether the Commissioner's interpretation of the statute is a reasonable one, not whether it is the only, or even the best, one. "The choice among reasonable interpretations is for the Commissioner, not the courts." National Muffler Dealers Ass'n, 440 U.S. at 488, 99 S.Ct. at 1312. We conclude, as has every other court faced with this issue, that Treasury Regulation Sec. 1.641(b)-3(a) is a reasonable and valid interpretation of section 641(a)(3).

Taxpayers contend that our 1944 opinion in Frederich v. Commissioner, 145 F.2d 796 (5th Cir.1944), is binding precedent for their propositions that (1) the period of administration envisioned by section 641(a)(3) of the Code is that period "actually consumed" by an administrator, not the period "actually required" to perform the ordinary duties of administration, and (2) a lower state court's finding relating to an estate's period of administration is controlling in a subsequent federal tax controversy involving section 641(a)(3). In this section, we review Frederich to find support for Taxpayers' first proposition. In light of later Fifth Circuit decisions that have limited the case to its special facts, however, we conclude that Frederich does not stand for the proposition Taxpayers suggest. As for Taxpayers' argument regarding the conclusive nature of the probate court's order, we conclude in the next section of this opinion that the United States Supreme Court, in Commissioner v. Estate of Bosch, 387 U.S. 456, 87 S.Ct. 1776, 18 L.Ed.2d 886 (1967), has implicitly overruled Frederich on this point. Thus, we agree with the Government's position that the legal propositions stated in Frederich no longer represent the law of this circuit.

The decedent in Frederich had been one of two partners carrying on the business of "Frederich's Market." After Frederich's death in 1934, the surviving partner continued the business with Frederich's estate constituting the other partner. Frederich's heirs wished the partnership to continue until such time as the business could be liquidated through an advantageous sale.

In Florida at that time, the County Judge's Court supervised the administration of estates. In 1938, a County Judge's Court appointed the surviving partner administrator of Frederich's estate and ordered the partnership to continue, pursuant to a Florida statute requiring County Judge supervision of a personal representative's continuation of a decedent's trade or business for a reasonable time. In 1942, the County Judge approved all previous acts of estate administration and again ordered continuation of the estate's interest in the business of the partnership.

In 1943, the IRS Commissioner asserted, and a Tax Court held, that the profits of the estate for tax years after 1937 would be deemed the taxable income of the heirs. The court found that all assets of the decedent had been collected and his debts paid prior to 1937, and that nothing substantial thereafter remained to be done except to make a distribution of the assets of the estate. A divided Fifth Circuit court reversed the judgment of the Tax Court.

Frederich was decided under the predecessor to Treasury Regulation Sec. 1.641(b)-3(a).11 As explained above, the former version was substantially similar to the current regulation; both versions define period of administration as the period "actually required" to perform the ordinary duties of administration. The court upheld the validity of the regulation and this language, but interpreted the regulation narrowly due to the facts of that case--most significantly, the fact that Frederich's estate was being administered subject to the direct supervisory jurisdiction of a Florida court.

The Frederich majority held that the Commissioner had no power to determine the reasonable period within which the administrator should conclude his administration where "under the Law of Florida the County Judge, having not only such power but also the duty to determine that question, should fix a different period." Frederich, 145 F.2d at 798. The court stressed the fact that the regulation as then worded contained no express language regarding either the "reasonable period" for settling estates or the Commissioner's role in determining that period, id., an omission of emphasis that the IRS has since rectified. The court did not address the issue of who would be empowered to determine the period of administration in independent administrations, where continuing court supervision is unnecessary, and whether a reasonableness standard would be appropriate in such situations. Rather, Frederich was premised on the majority's conclusion that a court order to prolong an administration, issued by a local court with statutory jurisdiction to supervise the administration of a decedent's business and authorize its continuation, conclusively established the period "actually required" to administer the estate.

It is true that Frederich contains dicta, unfortunately broad, lending support to an argument that under section 641(a)(3) of the Code, the Commissioner has no authority under any circumstances to determine a reasonable period of administration that differs from the period an administrator actually consumes.12 However, no court has ever cited Frederich for such a proposition. Moreover, our reading of a narrower holding is supported by Fifth Circuit cases decided after Frederich.

In Stewart v. Commissioner, 16 T.C. 1 (1951), aff'd, 196 F.2d 397 (5th Cir.1952), the decedent was a member of a partnership which was governed by an agreement providing that the partnership--and decedent's interest therein--should continue for five years following his death. Stewart died in 1938. His widow continued to administer the estate, of which she was independent executrix, until 1947. The IRS deemed the estate terminated prior to 1942, and taxed its income for the years 1942 through 1945 to the widow as sole beneficiary under her husband's will. The Tax Court found in favor of the Commissioner, concluding that petitioner had completed all the ordinary duties of independent administration prior to December 31, 1941. Id. at 15. The Tax Court distinguished Frederich, for as opposed to the executor in that case, the Stewart petitioner was an independent executrix, acting without interference by the probate court.13 Id. at 10.

The Fifth Circuit affirmed. In an opinion written by Judge Holmes, the dissenter in Frederich, the court stated:

Congress could, and in the interest of a uniform system of federal taxation did, clothe the Commissioner and the Tax Court with the power to determine (in the absence of conflicting valid affirmative action by the state court having jurisdiction in the premises) that an estate has ceased to be in the process of administration or settlement, and has ceased to exist for income tax purposes, when the administrator or executor has performed all the ordinary duties incumbent upon him in his fiduciary capacity.

Stewart, 196 F.2d at 398 (citing Chick, 166 F.2d at 337). See also Estate of Farrier, 15 T.C. at 281-82 (distinguishing Frederich on same grounds).

Likewise, our opinion in Brown v. Commissioner, 215 F.2d 697, 701 (5th Cir.1954), implicitly recognizes the power of the Commissioner to ascertain, under a reasonableness standard, whether the administration of a decedent's estate has terminated for federal income tax purposes. We held for the taxpayers in that case, however, because we concluded that it was not unreasonable to continue the administration during settlement efforts with a contestant to the decedent's will. Id. See also Wylie v. United States, 281 F.Supp. 180, 189-90 (N.D.Tex.1968) (citing with approval the language of the current Treasury Regulation).

Thus, after Stewart and Brown, Frederich was limited to a case in which a probate court has entered an order authorizing the continuation of an estate's administration, pursuant to the court's supervisory jurisdiction. In the instant case Brown sought and obtained an order from a Texas probate court authorizing him to continue the administration of his parents' Estates; however, as independent administrator, he did not require such an order to legally continue his administration. We must next examine, therefore, the effect of the order of the probate court on this tax controversy, and whether we are bound by Frederich to consider the order determinative of whether the Estates are still in the process of administration.

3. Effect of the Probate Court Order of April 29, 1982

In March 1982, shortly after the IRS sent deficiency notices to Taxpayers notifying them of the termination of the Estates for income tax purposes, Brown filed petitions