How the IRS Lost a $42 Million Estate Tax Case Over a Jewish Divorce
What counts as a marriage? And what counts as a divorce? The question may seem simple at first glance, but it can become complicated when different legal systems or cultural traditions are involved. Different jurisdictions may have different requirements or procedures for entering into or dissolving a marriage, and these may not always be recognized or respected by other jurisdictions. This can create problems when a party challenges the validity of a marriage or divorce that took place in a different location than where the challenge is brought.
In our case for today’s blog, we explore the story of the estate of Semone Grossman, a Holocaust survivor and New York parking garage tycoon who died in 2014. At the time he died, he was living together with Ziona Grossman, who he had married in Israel in 1980.
When she filed the estate’s tax return as his primary beneficiary and surviving spouse, the IRS claimed their marriage was invalid, and issued a notice of deficiency showing she owed about $42 million in taxes and penalties. But if she could prove the marriage was valid under New York law, she was allowed a “marital deduction” from her inheritance, eliminating that enormous tax bill. The Tax Court sided with Mrs. Grossman and held the marriage was valid for tax purposes. We’ll explain how she prevailed, in large part because of a certified English translation of an apostilled marriage certificate she obtained in Israel.
The Twists and Turns of Decedent’s Relationship History
Before we get to a description of the case, it’s important to give some background on Mr. Grossman’s relationship history and previous marriages. Ziona was not Mr. Grossman’s first wife, nor his second. She was his third. Below is a basic timeline of events.
1955: Married Hilda in New York
1965: Formally separated from Hilda
1967: Obtained a divorce from Hilda in Mexico without her participation; married Katia in a civil ceremony in New Jersey
1974: Relationship with Katia ended; Hilda sought a declaratory judgment that the Mexican divorce was null and void and that she was still the decedent’s lawful wife; in 1976, the New York court agreed with Hilda and invalidated the marriage to Katia
1986: Obtained a religious divorce (get) from Hilda in New York; married Ziona Grossman in a traditional Orthodox Jewish religious ceremony in Israel
2014: Died in New York; left nearly 90% of his $87 million estate to Ziona Grossman
The Place of Celebration: The Tax Court Upholds an Israeli Marriage for Estate Tax Purposes
The IRS argued that Ziona was not Grossman’s surviving spouse under state law properly applied, because Grossman’s religious divorce from his first wife Hilda was invalid under New York law—the Mexican court did not have jurisdiction over the marriage in 1967, and New York doesn’t recognize religious divorces such as get. Because of the (twice) ineffective divorce from Hilda, the IRS claimed that Grossman’s 1980 marriage to Ziona violated New York’s public policy against bigamy and was therefore invalid.
In response, the estate argued that Ziona was Grossman’s surviving spouse under both federal and New York law under the place of celebration rule, which respects marriages that are valid where they are celebrated unless they violate a strong public policy of New York.
To support her 1980 marriage to Grossman, Ziona produced a certified Hebrew to English translation of ketubah (Jewish marriage contract) and a certified translation of an apostilled marriage certificate issued by the Israeli government. Apostilles are official certificates that confirm the origin and accuracy of documents, such as birth certificates and marriage licenses. They are issued by government officials to prove that documents are genuine and valid for use in other countries that are signatories to the 1961 Hague Convention Abolishing the Requirement for Legalization of Foreign Public Documents.
Although the IRS thought Grossman and Hilda were still married due to the defective Mexican divorce and the religious (not civil) get, the apostilled documents proved that Israel recognized the validity of the 1980 marriage to Ziona. And for the Tax Court applying the place of celebration rule, that was sufficient for Ziona to win her case against the IRS and secure her status as Grossman’s surviving spouse, eliminating her $42 million tax bill.
Certified Translation of Hebrew Apostille Documents to English
This case illustrates the importance of planning ahead for estate tax issues, especially when dealing with complex family situations and cross-border marriages and divorces. This case also shows the need to consult with experts on foreign and religious law, as well as tax law, when drafting wills and other estate documents, and the need for certified English translations of properly authenticated apostille documents issued abroad.
Case: Estate of Grossman v. COMMISSIONER OF INTERNAL REVENUE, 2021 T.C. Memo 65 (T.C. 2021).
Contact All Language Alliance, Inc. to obtain certified English translation of apostille Israeli marriage certificates; certified translation of Jewish divorce get (also spelled Gett); certified translation of ketubah and other religious and public documents written in Hebrew and in other foreign languages; to hire a Hebrew deposition interpreter for an on-site deposition; a Hebrew deposition interpreter for a deposition via Zoom; or to retain a linguistics expert witness with unique knowledge of the Hebrew language.
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