Timely Filing of Estate Tax Returns Still Important

With seeming endless “to do” lists and jam-packed schedules, practitioners may be tempted to brush off IRS due dates, believing that the consequences will be minor.  However, the IRS takes due dates seriously, and failure to meet these deadlines can prove to be a detriment to the client.  In the recent case of Estate of Wallace R. Woodbury et al. v. Commissioner, TC Memo 2014-66, the estate tax return was filed nearly 2½ years late, resulting in the estate’s inability to pay its federal estate tax liability in installments.

As estate practitioners are well aware, it is often difficult to collect the necessary information and prepare the estate tax return within the allotted nine-month time period.  The IRS is also well aware of this predicament, and generously allows a six-month extension, which can be easily obtained by filing Form 4768.  No other extension beyond the six months will be granted.  To take advantage of many of the  benefits offered to estates, including the portability election, GST election and the installment election, the election must be made on a timely filed Form 706, U.S. Estate (and Generation Skipping Transfer) Tax Return.

The IRS holds firm to this timeliness requirement, and is unwilling to make any exceptions, regardless of the circumstances or reasoning for late filing.   The lesson to be learned is that while some tasks can be delayed or deferred to other days, the timely filing of the estate tax return is not one of those tasks.

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