IRS Proposes Fee for Estate Tax Closing Letters

#Lifestyle Wealth


The Internal Revenue Service has issued proposed regulations establishing a $67 fee for the issuance of an estate tax closing letter (also known as an IRS Letter 627).  

These letters provide an executor of an estate with evidence that the IRS has accepted a filed Form 706, “United States Estate (and Generation-Skipping Transfer) Tax Return,” and that the agency has closed its examination of the return. The proposed regs say that this information is important because of the unique nexus between an estate’s federal estate tax obligations and state and local law obligations to administer and close a probate estate.

The knowledge that the IRS has accepted the estate tax return form and has closed its examination of the return aids an executor’s ability to make the final division and distribution of estate assets and avoid potential personal liability for unpaid estate tax in making that distribution. An executor can be personally liable for making preferential payments to creditors or distributions to beneficiaries, leaving insufficient funds for the full payment of the tax owed to the government.

As of 2015, the IRS only issues closing letters on request.

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https://www.wealthmanagement.com/estate-planning/irs-proposes-fee-estate-tax-closing-letters

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