tax return; Form 706, Extension to File AGENCY: ACTION: hearing. SUMMARY: This document contains proposed regulations relating to Internal Revenue Service (IRS), Treasury. Notice of proposed rulemaking and notice of public
the filing of an application for an automatic 6-month extension of time to file an estate tax return (Form 706). The proposed
regulations provide guidance to executors of decedents’ estates on how to properly file the application for the automatic extension. This document also provides notice of a public
hearing on these proposed regulations. DATES: Written and electronic comments must be received by Outlines of topics to be discussed at the
January 19, 2001.
public hearing scheduled for January 24, 2001, at 10 a.m., must be received by January 3, 2001. ADDRESSES: Send submissions to: CC:M&SP:RU (REG-106511-00), room
5226, Internal Revenue Service, POB 7604, Ben Franklin Station,
-2Washington, DC 20044. Submissions may also be hand delivered
Monday through Friday between the hours of 8 a.m. and 5 p.m. to: CC:M&SP:RU (REG-106511-00), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue, NW., Washington, DC. Alternatively, taxpayers may submit comments electronically via the internet by selecting the "Tax Regs" option on the IRS Home Page, or by submitting comments directly to the IRS internet site at regs/reglist.html. The public hearing
will be held in Room 4716, Internal Revenue Service Building, 1111 Constitution Avenue, NW., Washington, DC. FOR FURTHER INFORMATION CONTACT: Concerning the proposed
regulations, Mary A. Berman, (202) 622-3090; concerning submissions of comments, the hearing, and/or to be placed on the building access list to attend the hearing, LaNita Van Dyke, (202) 622-7180 (not toll-free numbers).,
-3Washington, DC 20224. Comments on the collection of information Comments are
should be received by December 19, 2000.20.6081-1(b). To receive an extension of time to file an
estate tax return, the executor of a decedent’s estate must file Form 4768, AApplication for Extension of Time To File a Return and/or Pay U.S. Estate (and Generation-Skipping Transfer) Taxes.@ This information is required to obtain a benefit (an automatic 6-month extension of time to file an estate tax return). collection of information is mandatory if the extension is The
-4requested. estates. The reporting burden contained in §20.6081-1(b) is reflected in the burden of Form 4768, AApplication for Extension of Time To File a Return and/or Pay U.S. Estate (and Generation-Skipping Transfer) Taxes.@ The likely respondents are executors of decedents’
returns and tax information are confidential, as required by 26 U.S.C. 6103. Background In 1970, Congress amended section 6075(a) to provide that the Federal estate tax return is to be filed within 9 months after the date of the decedent’s death. Section 6081(a) provides
that the Secretary may grant a reasonable extension of time for filing any return; however, except in the case of taxpayers who are abroad, no such extension may be for more than 6 months. Under the current regulations, the district director or the service center has the discretion to grant an extension of time to file an estate tax return upon a showing of Agood and sufficient cause.@ Except in the case of executors who are
-5abroad, the extension may not be granted for more than 6 months. Requests for an extension of time to file are made by completing Form 4768, AApplication for Extension of Time To File a Return and/or Pay U.S. Estate (and Generation-Skipping Transfer) Taxes.@ Upon receipt of a Form 4768, the IRS reviews the application, makes a determination, and notifies the applicant as to whether an extension is approved and, if so, the length of the extension. In 1998, 110,100 estate tax returns were filed. In a significant number of these cases, the executors requested an extension of time to file. A majority of the applications
requested and received the maximum 6-month extension allowed by the statute and the regulations. The IRS and the Treasury
Department believe that executors of decedents’ estates would benefit from the certainty created by an automatic 6-month extension of time to file Form 706 and that it is appropriate to provide for the extension. Explanation of Provisions Under the proposed regulations the executor of a decedent’s estate will be allowed an automatic 6-month extension of time to file Form 706, AUnited States Estate (and Generation-Skipping Transfer) Tax Return,@ beyond the 9 months provided for by section 6075(a). The application for the automatic extension
must be submitted on Form 4768 (or in any other manner as may be prescribed by the Commissioner). The application must be filed
with the IRS on or before the date prescribed by section 6075(a) for filing the Form 706 and it must include an estimate of the
-6full amount of tax due. The automatic extension of time does not
apply to filers of Forms 706-A, 706-D or 706-NA who will continue to use Form 4768 to request extensions of time to file and pay estate taxes. The automatic extension of time also does not
apply to filers of Form 706-QDT who will continue to request any extension of time as provided in the instructions for Form 706-QDT. The proposed regulations continue to permit executors
who are abroad to request extensions beyond the automatic 6-month period. A return as complete as possible must be filed before the expiration of the automatic 6-month extension period. The return An
as filed will be the return required by section 6018(a)(1). extension of time for filing the return does not operate to extend the time for payment of the tax.
The proposed regulations also revise §20.6075-1 to conform to the changes proposed in §20.6081-1. Special Analysis It has been determined that this notice of proposed rulemaking is not a significant regulatory action as defined in Executive Order 12866. required. Therefore, a regulatory assessment is not. a Regulatory Flexibility Analysis is not required. Therefore, Pursuant to
-7section 7805(f) of the Internal Revenue Code, the regulations will be submitted to the Small Business Administration for comment on their impact on small business. Comments and Public Hearing Before these proposed regulations are adopted as final regulations, consideration will be given to any written (a signed original and eight (8) copies) or electronic comments that are submitted timely (in the manner described in ADDRESSES) to the IRS. Treasury and the IRS specifically request comments on the
clarity of the proposed regulations and how they can be made easier to understand. inspection and copying. A public hearing has been scheduled for January 24, 2001, at 10 a.m. in Room 4716, Internal Revenue Building, 1111 Constitution Avenue, NW., Washington, DC. Due to building All comments will be available for public
security procedures, visitors must enter at the 10th Street entrance, located between Constitution and Pennsylvania Avenues, NW. In addition, all visitors must present photo identification Because of access restrictions, visitors
to enter the building.
will not be admitted beyond the immediate entrance area more than 15 minutes before the hearing starts. For information about
having your name placed on the building access list to attend the hearing, see the “FOR FURTHER INFORMATION CONTACT” section of this preamble.
-8The rules of 26 CFR 601.601(a)(3) apply to the hearing. Persons that wish to present oral comments at the hearing must submit comments by January 3, 2001, and submit an outline of the topics to be discussed and the time to be devoted to each topic (signed original and eight (8) copies) by January 3, proposed regulations is Mary A. Berman, Office of the Associate Chief Counsel (Passthroughs and Special Industries), IRS. However, other
personnel from the IRS and Treasury Department participated in their development. List of Subjects in 26 CFR Part 20 Estate taxes, Reporting and recordkeeping requirements. Proposed Amendments to the Regulations Accordingly, 26 CFR part 20 is proposed to be amended as follows:
-9-
PART 20--ESTATE TAX; ESTATES OF DECEDENTS DYING AFTER AUGUST 16, 1954 Paragraph 1. The authority citation for part 20 is amended by adding an entry in numerical order to read in part as follows: Authority: 26 U.S.C. 7805 * * *
Section 20.6081-1 also issued under 26 U.S.C. 6081(a). * * * Par. 2. Section 20.6075-1 is revised to read as follows:
§20.6081, except that, if there is no numerically corresponding day in such ninth month, the last day of the ninth month is the due date. For example, if the decedent dies on July The
-10and §301.7503-1 of this chapter. As to additions to the tax in
the case of failure to file the return or pay the tax within the prescribed time, see section 6651 and §301.6651-1 of this chapter. For rules with respect to the right to elect to have
the property valued as of a date or dates subsequent to the decedent’s death, see section 2032 and §20.2032-1, and section 7502 and §301.7502-1 of this chapter. This section applies to
estates of decedents dying after August 16, 1954. Par. 3. Section 20.6081-1 is revised to read as follows:
§20.6081-1 Extension of time for filing the return. (a) Extensions of time for good cause shown. Where it is
impossible or impracticable to file a reasonably complete return within the time prescribed by statute, the person required to file the return may request an extension of time for filing. Except as provided in paragraph (b) of this section, an extension of time for filing an estate tax return is not automatic and is within the discretion of the Internal Revenue Service. Unless
the person required to file the return is abroad, an extension may not be granted for more than 6 months from the filing date prescribed by statute. Requests for an extension of time for
filing are made by submitting Form 4768, AApplication for Extension of Time To File a Return and/or Pay U.S. Estate (and Generation-Skipping Transfer) Taxes.@ The application must It should be
contain a full recital of the causes for the delay.
filed with the Internal Revenue Service office designated in the application’s instructions (except as provided in §301.6091-1(b)
-11of this chapter for hand-carried documents). The application
should, where possible, be filed sufficiently early to permit the Internal Revenue Service time to consider the matter and reply before what otherwise would be the due date of the return. Failure to file the application before the expiration of the time within which the return otherwise must be filed may indicate negligence and constitute sufficient cause for denial of the extension. (b) Automatic extension--(1) Application for extension.
Executors who are required to file Form 706, AUnited States Estate (and Generation-Skipping Transfer) Tax Return,@ may request an automatic 6-month extension of time beyond the date prescribed in section 6075(a) for filing the return by submitting Form 4768, AApplication for Extension of Time To File a Return and/or Pay U. S. Estate (and Generation-Skipping Transfer) Taxes.@ An automatic extension will be allowed if--
(i) The application is filed on or before the date prescribed in section 6075(a) for filing the return; (ii) The application is filed with the Internal Revenue Service office designated in the application’s instructions (except as provided in §301.6091-1(b) of this chapter for hand-carried documents); and (iii) The application includes an estimate of the amount of estate and generation-skipping transfer tax liability with respect to the estate.
-12(2) Executors who are abroad. If an executor who is abroad
has received an automatic 6-month extension, the executor may request an additional extension of time by following the procedures in paragraph (a) of this section. (c) Filing the return. A return as complete as possible The
must be filed before the expiration of the extension period.. (d) Payment of the tax. An extension of time for filing a
return does not operate to extend the time for payment of the tax. See §20.6151-1 for the time for payment of the tax, and
§§20.6161-1 and 20.6163-1 for extensions of time for payment of the tax.
(e) Effective date.
This section applies to estates of
decedents dying after August 16, 1954, except for paragraph (b) of this section which applies to estate tax returns due after the date these regulations are published as a final regulation in the Federal Register.
Robert E. Wenzel Deputy Commissioner of Internal Revenue