Guidance Issued on Use of Account Transcript in Lieu of Estate Tax Closing Letter (Notice 2017-12)

CCH Tax Day Report

The IRS has issued guidance on the methods available to confirm the closing of an examination of the estate tax return. For estate tax returns filed after June 30, 2015, the IRS ceased the automatic issuance of an estate tax closing letter for every estate tax return that was filed (except those returns that were filed solely for the purpose of electing portability and the portability election was denied). Estates and their authorized representatives may request an account transcript in lieu of an estate tax closing letter. An account transcript, which is a computer-generated report providing current account data, is available at no charge.

An account transcript includes transaction codes and descriptions of those codes. A transaction code “421” accompanied by the explanation “closed examination of tax return” indicates that the IRS’s examination of the estate tax return has been completed and the IRS examination is closed. Therefore, the account transcript can serve as the “functional equivalent” of an estate tax closing letter.

An estate tax closing letter and an account transcript both confirm the closing of the IRS’s examination on the estate tax return. However, the IRS may reopen the examination after the issuance of a closing letter or the entry of transaction code “421” on the account transcript for the purpose of determining the estate tax liability of an estate in the circumstances described in the closing letter and Rev. Proc. 2005-32, 2005-1 CB 1206. In addition, if the estate of a decedent who is survived by a spouse elects portability of the deceased spousal unused exclusion amount, the IRS has the authority to examine the return for the purpose of determining the estate tax liability of the surviving spouse.

An account transcript is requested by filing Form 4506-T, Request for Transcript of Tax Return. Currently, account transcripts for estate tax returns are not available through the IRS’s online Transcript Delivery System. If an automated method becomes operational, the IRS website, will be updated. To allow time for processing the estate tax return, requests for account transcripts should be made no earlier than four months after the filing of the estate tax return. Closing letters may be requested by calling the IRS at 866-699-4083, no earlier than four months after the filing date of the return.

Notice 2017-12, FINH ¶30,847

Other References:

Code Sec. 6018

CCH Reference – FINH ¶20,085.18

Code Sec. 7121

CCH Reference – FINH ¶22,095.07

Tax Research Consultant

CCH Reference – TRC ESTGIFT: 51,050

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