IRS will only issue estate tax closing letters upon request by the taxpayer

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Due to the increased volume in federal estate tax returns filed to make the “portability election,” the IRS has announced that estate tax closing letters will now only be issued upon request by the taxpayer.

What is an Estate Tax Closing Letter?

The IRS issues an estate tax closing letter when it determines that an estate tax return (Form 706) has been accepted or that all required adjustments have been completed. In other words, the closing letter provides written proof from the IRS that all federal estate tax liabilities have been satisfied. In many instances, an executor or trustee will wait to distribute all assets until receiving this closing letter. In most circumstances a personal representative can expect a closing letter within four to six months from the date that the estate tax return is filed. Additionally, in North Carolina the clerk of court will not allow an estate to be closed without either (1) a certification stating that no tax is due on the estate or (2) a closing letter from the IRS stating that all estate tax liability has been satisfied.

New Policy for Estate Tax Closing Letters

Before June 1, 2015, the IRS automatically issued estate tax closing letters to personal representatives who filed a Form 706. Now a personal representative must specifically submit a written request when filing the Form 706 to receive a closing letter.

If you have any questions regarding federal estate tax returns, you should contact an estate planning attorney to discuss strategy and the filing process.

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