We previously posted IRS Tell Estates No Closing Letters - Pull Transcripts Yourself! where we discussed that for estate tax returns filed after June 1, 2015, if the estate wished to receive a closing letter and form 5173, the personal representative or power of attorney had to send a letter to the IRS more than four months after the filing of the tax return requesting the issuance of both the closing letter and form 5173. The IRS issued Notice 2017-12, 2017-4 IRB where it announced that an IRS-issued account transcript can substitute for an estate tax closing letter.
An estate tax closing letter (IRS Letter 627) is a written communication from IRS that specifies the amount of the net estate tax, the state death tax credit or deduction, and any generation-skipping transfer tax for which the estate is liable.
The estate tax closing letter also confirms that the estate tax return has either been accepted by IRS as filed, or has been accepted after an adjustment by IRS to which the estate has agreed. Thus, the receipt of an estate tax closing letter generally indicates that, for purposes of determining the estate tax liability of the decedent's estate, the IRS examination of the estate tax return is closed.
Prior to June 1, 2015, IRS issued an estate tax closing letter for every estate tax return filed (except in certain limited instances). However, for estate tax returns filed on or after June 1, 2015, IRS changed its policy and issues an estate tax closing letter only at the request of an estate, which request is to be made at least four months after the filing of the estate tax return.
Notice 2017-12, 2017-4 IRB that announces that an IRS-issued account transcript can substitute for an estate tax closing letter. In so doing, IRS has updated some of the information on the Transcripts in Lieu of Estate Tax Closing Letters webpage.
IRS says that it understand that executors, local probate courts, state tax departments, and others have come to rely on estate tax closing letters for confirmation that the IRS examination of the estate tax return has been completed and the IRS file has been closed. Estate tax closing letters continue to be available upon request. However, an account transcript may substitute for an estate tax closing letter and is available at no charge.
Estates and their authorized representatives may request an account transcript by filing Form 4506-T, Request for Transcript of Tax Return. Currently, Form 4506-T can be filed with IRS via mail or facsimile (per the instructions on the form). Although account transcripts for estate tax returns are not currently available through IRS's online Transcript Delivery System (TDS), the IRS website, www.irs.gov, will have current information should an automated method become operational.
To allow time for processing the estate tax return, requests should be made no earlier than four months after filing the estate tax return.
IRS says that estates and their authorized representatives who wish to continue to receive estate tax closing letters may call IRS at (866) 699-4083 to request an estate tax closing letter no earlier than four months after the filing of the estate tax return.
This certainly presents an opportunity to demonstrate how the IRS can create unnecessary complexities (and accompanying misery) for people wishing to receive Federal Closing Letters. Lots of luck!
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Robert S. Blumenfeld -
Estate Tax Counsel
Mr. Blumenfeld concentrates his practice in the areas of International Tax and Estate Planning, Probate Law, and Representation of Resident and Non-Resident Aliens before the IRS. Prior to joining Marini & Associates, P.A., he spent 32 years as the Senior Attorney with the Internal Revenue Service (IRS), Office of Deputy Commissioner, International.
While with the IRS, he examined approximately 2,000 Estate Tax Returns and litigated various international and tax issues associated with these returns.As a result of his experience, he has extensive knowledge of the issues associated with and the preparation of U.S. Estate Tax Returns for Resident and Non-Resident Aliens, Gift Tax Returns, Form 706QDT and Qualified Domestic Trusts.
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