The court may reject both the taxpayer’s and the government’s values

In Estate of Thompson, 499 F.3d 129 (2nd Cir. 2007), the court upheld the Tax Court’s rejection of both the taxpayer’s and the government’s valuation of stock in a closely held corporation. 

The court rejected the taxpayer’s argument that the Tax Court was bound to accept the taxpayer’s value once the court rejected the government’s value.  The Tax Court was thus permitted to conduct its own valuation of the stock.  Nonetheless, the appellate court remanded the case to correct a calculation error.