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NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE TAX COURT COMMITTEE ON OPINIONS

TAX COURT OF NEW JERSEY

LOUIS B. OFF, Executor of : the Estate of Lois Eckel, : : Plaintiff, : : v. : OPINION : DIVISION OF TAXATION FOR THE : STATE OF NEW JERSEY and TRANSFER : INHERITANCE TAX BUREAU, : : Defendant. :

3 Decided July 17, 1996

Theodore S. Ridgway for plaintiff (Ridgway and Ridgway, attorneys)

Paul Tannenbaum for defendant (Deborah T. Poritz, Attorney General of the State of New Jersey, attorney)

RIMM, J.T.C.

This is a transfer inheritance tax matter in which the Director, Division

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of Taxation, moves for summary judgment. The Director contends that the complaint must be dismissed under N.J.S.A. 54:34-13 and N.J.S.A. 54:49-18(a) because plaintiff neither protested the Director's assessment nor filed a complaint in the Tax Court to challenge the assessment within ninety days of the date the assessment was made. I The decedent, Lois M. Eckel, died on September 28, 1991. Her Last Will and Testament named plaintiff, Louis B. Off, as her sole beneficiary and the executor of her estate. On September 1, 1992, approximately a year after the date of death, plaintiff filed a New Jersey Transfer Inheritance Tax Return. The return indicated that $151,687 was due for transfer inheritance taxes. The calculations resulting in the indicated taxes involved a deduction against the assets of the estate for claimed executor's commissions in the amount of $39,981.12. 3 On January 7, 1993, the Director sent a notice of assessment to plaintiff indicating that, based on an audit of the return filed, the amount of tax due was increased by $3,528.86 from $151,687 to $155,215.86. The tax increase was due to the Director's reduction from $39,981.12 to $17,250.63 of executor's commissions allowed as a deduction on the tax return. A notation on the analysis of tax attached to the assessment notice stated as follows: "Not allowed on real property, N.J.A.C. 18:26-7.10." The version of that regulation then in effect provided as follows, in its entirety: (a) In the absence of a judgment of the court exercising jurisdiction over the probate of an estate, the deduction for executor's or administrator's commissions shall be determined as of the date of death of decedent as follows:

First $ 200,000 5 percent 3 Next 800,000 3

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New Jersey Law