Generally, information of a confidential nature is only disclosed when a taxpayer provides written authorization.

Estates, trusts and receiverships may be represented by their trustees, receivers, guardians, executors, or regular full-time employees. See 26 CFR 601.504(b)(2)(iv) and (v). IRC 2203 defines the term "executor" .

The declaration on Form 706, U.S. Estate Tax Return, when executed by an attorney, accountant or enrolled agent meets the "duly authorized in writing" requirement of IRC 6103(e)(6). A separately executed Form 2848 is not required in order for IRS to make disclosures to the attorney, accountant or enrolled agent representing the executor or administrator of the estate when the attorney, accountant or enrolled agent has executed the declaration on Form 706.

Many times estate cases are received from the Compliance function with the AIMS records established. The tax period is controlled on AIMS as 000000.

Appeals Processing Services (APS) follows the procedures contained in IRM 8.2.1, Pre-90-Day Income Tax Cases, when receiving a case, establishing the case on Appeals Centralized Database System (ACDS), and transmitting the case to the Appeals Team Manager (ATM) for assignment and acknowledgment of the case using the Uniform Acknowledgment Letter (UAL).

There are a few unique entries required on ACDS when establishing an estate tax case. They are -

When the Appeals Officer receives a newly assigned case, he/she follows the same procedures detailed in IRM 8.2.1, Pre-90-Day Income Tax Cases. Besides the normal items to verify in the preliminary review such as accuracy of the statute date, mailing of the UAL to the taxpayer, accuracy of the database information on the case summary card, and verifying the case is ready for Appeals, the following items are important preliminary review considerations for the Appeals Officer:

For purposes of deciding whether the case is ready for Appeals, if a valuation issue, check the case file for a government appraisal. If the facts are disputed, check the case file for a rebuttal to the protest.

Remember that the burden of proof provision, under IRC 7491, applies to estate and generation-skipping transfer taxes.

Upon receipt of a IRC 6166 case the Appeals Officer contacts the Technical Guidance Coordinator (See IRM 8.1.4.8 and IRM 8.2.1) for further instructions.

A taxpayer may appeal the determination that the estate does not qualify for an extension under IRC 6161or IRC 6166. (See Delegation Order 66 and Rev. Proc. 79-55). Appeals may consider reasonable cause or undue hardship as long as the taxpayer filed the application for extension timely or made the payment timely. Treas. Reg. Section 20.6161-1(b) provides that an application for extension of time for payment of the tax or of an installment under IRC 6166 will not be considered unless the extension is applied for on or before the date for payment of the tax or the installment. The final authority granted to Appeals does not include the authority to consider whether the taxpayer had reasonable cause for filing an application late or making a payment late. If an Appeals Officer determines, however that the application was timely filed, the Appeals Officer can then determine whether reasonable cause or undue hardship exists for granting an extension of time to pay the taxes. If it is determined the application was filed late, the appeal will be denied. The Appeals Officer should cite Treas. Reg. 20.6161-1(b) in the letter to the taxpayer.

Treas. Reg. 20.6161-1(a)(1) provides examples for reasonable cause.

The estate tax return, Form 706, and payment of estate tax liability of a decedent are due within nine months of the decedent’s death. IRC 6166(a)(1), as an exception to this rule, provides that if the value of an interest in a closely held business included in determining the value of the gross estate of a decedent exceeds 35 percent of the adjusted gross estate, the executor of the estate may elect to pay part or all of the estate tax in two or more (but not more than ten) equal installments. The first installment of tax must be paid on or before the date selected by the executor which is not more than five years after the date prescribed by IRC 6151(a)for payment of the tax. An executor electing to defer estate taxes under IRC 6166 must make annual payments of interest during the deferral period. Interest must be paid annually during the five-year period before the first installment of tax is due. When an estate fails to make payments of principal or interest the Service may terminate the deferred payment election and force an acceleration of payment of the estate tax by issuing notice and demand.

An election under IRC 6166(a) to pay the estate tax in installments must be made on a timely filed return.

IRC 6165 and IRC 6324A, allow the Secretary to require security in the case of an extension under IRC 6166.

Technical Advise requests on a disputed extension of time to pay estate tax are permissible when an estate consists largely of an interest in a closely held business. For example, requesting technical advise is appropriate when determining whether a decedent’s farm holding constitute an interest in a closely held business, and if so, whether the value of the holdings constitute the necessary percentage of the total estate as required by IRC 6166. Do not request technical advice on whether the taxpayer should be granted an IRC 6161 extension of time to pay tax on the ground of reasonable cause or undue hardship.

IRC 2032A and IRC 2057 cases require a Form 6111, Notice of Special use Valuation Election, (IRC 2032A). The Estate Tax Attorney prepares the Form 6111 and includes it in the case file. Because of the Appeal, if the information contained on the Form 6111 needs to change, the Appeals Officer prepares a new Form 6111, which supersedes the form prepared by the Estate Tax Attorney. If an IRC 2032A or IRC 2057 issue arise in Appeals and the Estate Tax Attorney did not prepare a Form 6111, the Appeals Officer will prepare a new Form 6111 following the instructions on the form with the required attachments.

The Appeals Officer will provide closing procedure instructions to APS on the customized Form 5402. The instructions will be to perform normal closing procedures and then return the case file to the Group Manager of the Estate Tax Attorney that closed the case to Appeals so they can provide Technical Service Advisory with the Form 6111 and attachments for filing the lien. See See IRM 8.7.4.2.9.

The feature code for an Emerging Issue is "EM" The feature code for an Appeals Coordinated issue is "AI" . Upon receipt of the case the Appeals Officer will verify feature code "EM" or "AI" is used if there is an Emerging Issue or an Appeals Coordinated Issue. The Appeals Officer will update the feature code when it is missing.

The Appeals Officer will submit Form 13381 to Technical Guidance Coordinator through the Team Manager.

IRC 6166 – Installment payment of Estate Taxes is an estate and gift tax emerging issue. At issue is whether Compliance can require taxpayers to agree to the posting of a bond or the filing of a lien as a condition of the 6166 election. Tracking of these cases in CIRS is not required.

Current Appeals Coordinated Estate and Gift Tax Issues are listed on the Technical Guidance Webpage.

Tax Computation Specialists (TCS) usually prepare the settlement computations for estate tax cases following the general procedures outlined in IRM 8.17.2, General Settlement and Rule 155 Computations.

Prior to preparing the settlement computation, review the case file to check for verification of the state death tax credit or other credits, if necessary.

Form 3614-A, Estate Tax, is used for the computation on most cases. Compute the tax on the taxable estate plus the amount of taxable gifts made by the decedent after 1976 (adjusted taxable gifts). Form 3614-A provides for computing the gross deficiency by allowing only substantiated credits and net deficiency after allowing additional credits, if substantiated.

Once the tax is computed, reduce it by the gift taxes payable on gifts made after December 31, 1976. Reduce it further by certain credits or deductions.

Estate tax computations are complicated and often involve one or more unknowns. The Inter-Est Program is extremely helpful when completing these very complex interrelated computations.

Form 890-AD is the special purpose agreement form used for estate tax cases.

Proof of taxes paid is generally required before allowing a credit under IRC 2011 for state death taxes or under IRC 2014 for foreign death taxes.

As previously stated, Appeals may close an estate tax case without credit evidence when the SB/SE Area Director of the office with jurisdiction is satisfied local enforcement procedures for the collection of state death taxes are adequate to insure that the claimed IRC 2011 credit will be paid to the state.

When the credit is required to be established but is not, and a limited time remains on the statute for assessment or scheduling an overassessment (usually six months or less), obtain a Form 890 or Form 890-AD for the gross deficiency.

Secure a Form 890 or Form 890–AD agreement for the net deficiency following these procedures:

When closing estate tax cases with tax credits requiring subsequent verification, process them through the office of the SB/SE Area Director. The SB/SE Area Director issues the final closing letter. Statute control on returned cases is maintained by the SB/SE Area office. (See IRM Part 4).

Appeals Officers will provide special processing instructions to APS for processing and closing IRC 6166, IRC 6161, IRC 2032A and IRC 2057 cases by using the customized Form 5402. These cases require special action by Compliance to unfreeze an account, identify a IRC 6166 election or to secure a bond or lien. If there are any questions, contact the Program Analyst on the staff of the Director, Tax Policy and Procedure (Exam).

For IRC 6161 cases, the Appeals Officer will prepare a Customized Form 5402 that includes special IRC 6161 closing procedures for APS. The Appeals Officer will identify the following special processing instructions on the Form 5402 as follows:

For IRC 6166 cases, the Appeals Officer will prepare a customized Form 5402 that includes IRC 6166 closing procedures for APS. These procedures apply to both type "ES" cases that include 6166 issues and type "6166" cases. Where this information does not already exist on the Form 5402 template, write it in on the Form 5402 in the Disposal Section. State the following:

For IRC 2057 and IRC 2032A cases, the Appeals Officer will prepare a customized Form 5402 that includes IRC 2057 and IRC 2032A closing procedure instructions for APS. State the following on the Form 5402:

To properly close estate tax cases, it is important to understand the definitions of net deficiency/overassessment and gross deficiency/overassessment:

When closing a net deficiency estate tax case, show the "net" deficiency in Item 12 of Form 5403 if either of the following two situations exists:

For estate cases that do not involve state or foreign death tax credits, enter the "gross" deficiency/overassessment in Item 12, Form 5403.

In docketed cases, whether settled or tried, if required substantiation of state or foreign death tax has not been submitted, make the assessment for gross deficiency or gross overpayment and follow the same credit procedure as in agreed nondocketed cases. The petitioner may obtain credit for state inheritance taxes after the decision is entered in the United States Tax Court case if a claim is submitted to the Service within the statutory period.

Enter the "net" deficiency or overassessment in Item 800/801, Form 5403.

Appeals Processing Services (APS) follows the procedures contained in IRM 8.2.1, Pre-90-Day Income Tax Cases, when establishing the case on ACDS, and transmitting the case to the Appeals Team Manager (ATM) for assignment and acknowledging receipt of the case using the Uniform Acknowledgment Letter (UAL).

There are a few unique entries required on ACDS when establishing an estate tax case. They are -

When the Appeals Officer receives a newly assigned case, he/she follows the same procedures detailed in IRM 8.2.1, Pre-90-Day Income Tax Cases. Besides the normal items to verify in the preliminary review such as accuracy of the statute date, mailing of the UAL to the taxpayer, accuracy of the database information on the case summary card, and verifying the case is ready for Appeals, the following items are important preliminary review considerations for the Appeals Officer:

For purposes of deciding whether the case is ready for Appeals, if there are valuation issues, check the case file for a government appraisal. If the facts are disputed, check the case file for a rebuttal to the protest.

Generally, Tax Computation Specialists (TCSs) prepare settlement computations on gift tax cases using Form 3615-A, Gift Tax. Gift tax rates are found in IRC 2502.

Tax is computed on the total taxable gifts for the calendar year and for preceding calendar periods (see IRC 2502(b)) at current tax rates. This tax is reduced by tax on taxable gifts for preceding periods to arrive at the tax on current gifts.

The special purpose agreement form for gift tax cases is Form 870-AD or a Form 890. Form 890 is only used when the only issue is the amount of the exemption and there is no tax due.

The detailed instructions for preparing Form 5403 are found in IRM Exhibit 8.20.7-1, Form 5403 - Appeals Closing Record (Instructions.)

Appeals Officers are encouraged to contact the offices of Appeals Appraisal Services and Art Appraisal Services within the Office of Chief, Appeals when needed.

These offices maintain a core of financial analysts and art appraisers to assist service personnel on their cases. In addition, these offices can assist Appeals Officers in locating experts in other fields.

The AO consults with the Office of Art Appraisal Services on any case claiming a value for a single work of art in excess of $20,000.

Telephone discussions with this office are encouraged in order to take advantage of expert advice and to facilitate the handling of all referrals for valuation assistance. Assistance is also available in determining fair market value of objects with less than a $20,000 value.

See IRM 8.18.1.3, Valuation Assistance, for detailed instructions and procedures to determine information and items necessary to obtain valuation assistance on works of art.

Address requests for Art Appraisal Services Assistance:

Address requests for Appeals Appraisal Services (Financial, Business or Real Estate Investment Trust) Assistance to:

Requesters are encouraged to contact the valuation specialists by telephone to informally discuss a valuation problem to determine the type of assistance required. For detailed instructions and procedures, see IRM 8.18.1, Valuation Assistance Handbook.

The notice of deficiency letter, Letter 901(cg), is used for estate and gift tax cases and is available on the Appeals Centralized Database System (ACDS) through the Appeals Generator of Letters and Forms (APGolf).

In ACDS, there is an option to select one of two opening paragraphs for Letter 901(cg). Select the paragraph that reads as follows:

Letter 901(cg) has lines in the heading for the type of tax and form number. Since the opening paragraph does not specify the type of tax, it is important to complete this information.

Change the "Tax Year Ended" default selection on the input screen, using the drop down menu and change to -

Use the salutation"Dear Taxpayer" .

The gross deficiencyis the amount that is entered on Letter 901(cg).

Form 4089-A, Notice of Deficiency-Statement, is used as a summary of the deficiency and is the first page of the notice statement in all estate tax and gift tax cases.

Modify the form as follows:

Enter penalties or additions to tax in columnar format under and to the right of the deficiency block. List each penalty separately.

The gross deficiency is the amount that is entered on Form 4089-A and Form 890.

When Form 4089-A is used, prepare Form 890 and include with the notice.

For estate tax cases, an explanatory paragraph must be included on Form 890 and Form 4089-A when credits for estate, inheritance, legacy or succession taxes paid to a State, territory, District of Columbia, or a possession of the United States, are disallowed in whole or in part. Use the following paragraphs depending on the situation.

Always use the same paragraph on the Form 890 as used on the Form 4089-A.

This section covers instructions for preparing the estate and gift tax computation forms. Use Form 3614-A for estates tax cases and Form 3615-A for gift tax cases.

Write an explanation for each item changed. The explanations of adjustments must be computer-generated using the Form 886-A or a separate schedule such as Word document. See TCS web page on the Appeals web site for sample paragraphs.

For estate tax cases, use a Form 3228 (Adjustments to Taxable Estate) if it helps clarify the notice of deficiency. Use a Form 3229 (Computation of Credit for Tax on Prior Transfers), pages 1 and 2 (and page 3, if applicable) in notices of deficiency to explain complicated adjustments involving credits for tax on prior transfers.

For gift tax cases, an explanation for the Adjustments to Total Taxable Gifts for Prior Periods amount may be necessary.