IRS Says Appeals Court Followed Law in Estate Tax Dispute

The Supreme Court should deny a request to review an Eighth Circuit ruling that found an estate must include life insurance proceeds as taxable income because the estate didn’t avail itself of other ways to limit its tax exposure, the government said Monday.

The high court shouldn’t grant the Estate of Michael P. Connelly’s petition for certiorari because it “misunderstands the function of the estate tax,” the government said in brief.

The IRS assessed $1 million in taxes on Connelly’s building materials company, Crown C Corp. after it determined that the business failed to report life insurance proceeds ...