Virginia Hughes Chiles, of the Estate of Earle A. Chiles, Deceased v. United States

This is a tax refund case for the entire amount of federal estate tax assessed against and paid by the estate of decedent Earle A. Chiles. Virginia Hughes Chiles, executrix of the estate (“Estate”), appeals the district court’s summary judgment in favor of the Government. The Estate argues that the unlimited marital deduction for bequests to surviving spouses precludes imposition of any federal estate tax in this case. Alternatively, the Estate claims that the assessment of federal estate taxes in this case violates the Uniformity Clause and the Fifth Amendment of the Constitution. We affirm.

BACKGROUND

Earle A. Chiles, an Oregon resident, bequeathed his entire estate of approximately $20 million to his surviving wife, appellant Virginia Hughes Chiles. At the time of Mr. Chiles’ death in 1982, Oregon imposed a substantial inheritance tax on transfers of property to a surviving spouse. The Estate ultimately paid $2,299,121 in Oregon inheritance taxes. Federal estate taxes were assessed on the taxable estate, which consisted of property that did not pass to the surviving spouse — the sum of the estate’s debts, expenses, and state taxes. Under a complex series of calculations, the…