Edward ExPost was dying, his family revoked his advance medical directive in late 2009. On January 1, 2010, he died at 12:42 a.m. He left his entire $1 Billion estate to his two loving children. Due to fights on Capitol Hill over a health care bill and President Obama’s Hawaiian vacation plans, no law was passed until February 1, 2010 extending the estate tax which expired on December 31, 2009. In their haste to go celebrate President’s Day, Congress forgot about reauthorizing a step-up in basis for people inheriting from decedent’s estates.

On October 1, 2010, Edward’s Executrix, Eugenia Ex Post, filed his Federal Estate tax return. She paid the tax that would have been due under the new law. She took Dad’s company public to pay for the taxes. She sold some stock in Dad’s Company. The it was worth $490,000,000 more than what he paid for it. She then immediately filed an amended return seeking a refund of $500,000,000 on the estate tax and citing the fact that at the moment of his death there was an exclusion equal to 100% of the tax.. The Service received the amended return and after auditing it, denied the refund claim. She then filed suit in the U.S. Court of Federal Claims claiming that the law was ex post facto and thus violated the U.S. Constitution.

On April 15, 2011, Eugenia filed a Fiduciary Income Tax return showing a capital gain of $498,000,000 and estate tax deduction of $299,000,000. She paid income taxes to IRS of $45,000. She again filed for a refund and the refund claim was denied at which point she filed another lawsuit in the U.S. Claims Court, claiming that in effect she should have been allowed to step-up her basis.