4.25.14. Miscellaneous Procedures

(1) This IRM subsection provides miscellaneous procedures associated with the examination of estate, generation skipping transfer tax and gift tax returns. This IRM contains guidance related to extensions, liens and IDRS codes unique to estate and gift tax examinations, and links to various Servicewide resources.

(1) Estate and gift tax examiners and managers assigned to examine and oversee the examination of estate and gift tax returns and issues are responsible for complying with servicewide policies and authorities set forth in IRM 1.2.1.5., Servicewide Policies and Authorities, Policy Statements for the Examining Process.

(2) Examination of estate and gift tax returns should be conducted in a manner that will promote public confidence as stated in the Mission of the Service. See IRM 1.2.1.2.1, and Policy Statement 1-1.

(3) Policy Statement 4-52 established a general guideline that examination and processing of returns should be completed within 18 months of the filing date. See IRM 1.2.1.5.18, Policy Statement 4-52.

(4) Estate and gift examiners and managers assigned to examine and oversee the examination of international estate and gift tax returns and issues are responsible for complying with all applicable servicewide examination delegation orders and SB/SE delegation orders. A table summarizing estate and gift delegation orders is available at IRM 4.25.14.10, Estate and Gift Tax, Miscellaneous Procedures, Signature Authority.

(5) Section 3504 of RRA 98, Public Law 105-206 requires the Service to include an explanation of the examination and collection process, as well as information about assistance from the Taxpayer Advocate with any first report/notice of proposed deficiency. Pub 3498, The Examination Process, must be used for this purpose.

(6) Statement of Procedural Rules 601.506 requires that examiners must forward any correspondence (or copy), discussions, reports and/or other material to the taxpayer at the same time it is sent to the representative.

(7) The Form 706 return instructions and CFR 20.6018-4, CFR 25.6019-3, and CFR 25.6019–4 list required filing documents.

(1) The National Quality Review System (NQRS) is a web-based review system used by Estate and Gift Tax Policy, Estate and Gift Tax Examination Management and Estate and Gift Tax Quality Measures and Analysis (QMA) to generate and review reports analyzing national quality performance based upon standardized quality attributes set forth in Document 12499, Estate and Gift Tax Examination Embedded Quality Job Aid. NQRS report data is compiled by QMA on a quarterly basis, but ad hoc reports may be obtained monthly. The use of NQRS is explained in additional detail in IRM 4.25.1.11, Manager Embedded Quality Review and Specialty Exam National Embedded Quality Review Programs.

(2) Operational Reviews and related NQRS reports are conducted by Territory Managers and the Chief, Estate and Gift to measure national adherence to quality standards and managerial performance and/or oversight.

(3) Customer (i.e. taxpayer) satisfaction reports are generated by SB/SE Operation Support Research on a quarterly basis. These reports provide masked taxpayer narratives that are responsive to a pre-defined set of survey questions. The quarterly survey reports are used to identify areas for examination quality improvement.

(4) Frequent front-line manager reviews are conducted under the Examination Quality Review System (EQRS), with the frequency based on annual personnel requirements.

(1) The following table sets forth Estate and Gift Tax program specific terms and definitions:

(2) The following table sets forth commonly used acronyms:

(1) The Estate and Gift Tax program is required to follow all servicewide examination procedures and those set forth in SBSE examining process IRM. The following IRM subsections provide additional information relating to the processing, classification and examination of Estate and Gift Tax program returns and claims:

• IRM 4.25.1, Estate and Gift Tax, Estate and Gift Tax Examinations

• IRM 4.25.2, Campus Procedures for Estate Tax

• IRM 4.25.3, Planning, Classification and Selection

• IRM 4.25.4, International Estate and Gift Tax Examinations

• IRM 4.25.5, Technical Guidelines for Estate and Gift Tax Issues

• IRM 4.25.6, Report Writing Guide for Estate and Gift Tax Examinations

• IRM 4.25.7, Estate and Gift Tax Penalty and Fraud Procedures

• IRM 4.25.8, Delinquent Returns and SFR Procedures

• IRM 4.25.9, Requests for Abatement, Claims for Refund and Doubt as to Liability in Estate and Gift Tax Cases

• IRM 4.25.10, Case Closing Procedures

• IRM 4.25.11, Special Examination Procedures

• IRM 4.25.12, Valuation Assistance

• IRM 4.25.13, Appeals, Mediation and Settlement Procedures

• IRM 4.2.8, Guidelines for SB/SE National Quality Review

• IRM 25.6.1, Statute of Limitations Processes and Procedures

• IRM 1.2.65, Servicewide Policies and Authorities, Small Business/Self Employed Delegations of Authority

(1) IRC 6081 provides for the extension of time to file estate and gift tax returns. A Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, is generally due within nine months after the date of death. An estate may file Form 4768 , Application for Extension of Time to File a Return and/or Pay U.S. Estate (and Generation-Skipping Transfer) Taxes, to apply for an extension of time to file. See IRM 4.25.2.8.2, Form 4768, Application for Extension of Time to File a Return and/or Pay U.S. Estate (and Generation-Skipping Transfer) Taxes.

(2) An estate may apply for an automatic six month extension of time to file a Form 706, Form 706-A, Form 706-D, Form 706-NA or Form 706-QDT. Unless the executor is out of the country, the maximum extension of time to file is six months from the due date of the applicable return.

(3) A request for an extension of time to file must be made by the due date of the return.

(4) No acknowledgement of the extension approval is sent to the taxpayer.

(5) An extension of time to file does not extend the time to pay.

(6) If the extension is approved , Transaction Code (TC) 460 will be present on transcripts followed by the approved extension date.

(7) If the extension is denied , Transaction Code (TC) 460 will be present on transcripts followed by "Denied".

(1) A Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return, is generally due on April 15 following the close of the calendar year in which the gift was made. If the donor dies in the calendar year in which the donor made a gift, the Form 709 is due on or before the due date of the estate tax return (including extensions), or on April 15 of the year following the calendar year of the gift, whichever date is earlier.

(2) Except as provided in IRC 6081 with respect to certain U.S. citizens and residents living outside the United States, an extension of time to file a gift tax return may not exceed six months from the due date of the return. See 26 CFR 1.6081-1(a).

(3) A request for an extension of time to file must be made by the original due date of the return, without extensions other than the automatic extension for U.S. citizens and residents abroad provided in 26 CFR 1.6018-5(a).

(4) Form 8892, Application for Automatic Extension of Time to File Form 709 and/or Payment of Gift/Generation-Skipping Transfer Tax, is used to request an automatic six month extension of time to file a gift tax return where the taxpayer is not also requesting an extension to file Form 1040. The Form 1040 extension request, Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, is used to request an automatic six month extension of time to file both the Forms 1040 and 709.

(5) Upon a timely request, an automatic six month extension of time to file a gift tax return will be granted. See 26 CFR 25.6081-1. No acknowledgement of the automatic extension approval is sent to the taxpayer where the extension request was timely filed. Campus procedures relating to the processing of Extensions of Time to File are located at IRM 4.25.2.8.2.4, Extension of Time to File and IRC 6161 Extension of Time to Pay.

(6) All Form 8892requests for extensions of time to file postmarked after the due date of the Form 709 will be denied.

(7) An extension of time for filing a Form 709 does not extend the time for payment of tax. See 26 CFR 25.6081-1(c).

(8) If the extension is approved, Transaction Code (TC) 460 will be present on transcripts followed by the approved extension date.

(9) If the extension is denied, Transaction Code (TC) 460 will be present on transcripts followed by "Denied".

(1) IRC 6161(a)(1) permits an extension of time for payment of the amount shown, or required to be shown on an estate tax return, for a reasonable period not to exceed 12 months in the case of estate tax from the date the payment is due. See IRM 4.25.2.8.2.4, Extension of Time to File and IRC 6161 Extension of Time to Pay.

(2) A donor may apply for an extension of time to pay gift tax or as to a deficiency of gift tax. See Form 1127, Application for Extension of Time for Payment of Tax Due to Undue Hardship, and IRM 5.5.5.9, Extension Requests to Pay Gift Tax. All extension requests are processed at the Estate and Gift Operation at the E&G Campus. See IRM 4.25.2.8.2.4, Extension of Time to File and IRC 6161 Extension of Time to Pay.

(3) If the extension is approved, Transaction Code (TC) 468 (estate) or Transaction Code (TC) 470 (gifts) will be present on transcripts followed by the approved extension date. See IRM 4.25.2.8.2.5 paragraph (4).

(4) If the extension is denied, Transaction Code (TC) 468 (estate) or Transaction Code (TC) 470 (gifts) will be present on transcripts followed by the original due date. See IRM 4.25.2.8.2.5 paragraph (4).

(1) IRC 6163(a) permits an extension for paying estate tax on the value of a reversionary or remainder interest in the property included in the gross estate. The time for payment will be postponed for six months after the termination of the preceding interest in the property. See IRM 4.25.2.8.2.6, Estate Tax Extension of Time to Pay Under IRC 6163, for E&G Campus processing procedures.

(2) IRC 6163(b) permits the extension of time for paying the estate tax that was granted under IRC 6163(a) if the estate can show reasonable cause for the additional extension. The extension may be for up to an additional three years from the expiration date of the postponement provided for in IRC 6163(a). Neither tax nor accrued interest is due and payable until six months after the precedent interest terminates.

(3) An estate that elected to postpone that part of the estate tax attributable to a reversionary or remainder interest may prepay a portion of the outstanding liability without payment of accrued interest or acceleration of the remaining tax. See Rev. Rul. 83–103.

(4) See IRM 4.25.11.11.5 , Preparing Agreed Case with 6163 Election Case File for CCP and IRM 4.25.11.12, Foreign Bank and Financial Account Report (FBAR), for additional examination guidance.

(1) Form 2758, Application for Extension of Time to File Certain Excise, Income, Information, and Other Returns, replaced Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns. Filers of Forms 706-GS(D), 706-GS(T), 1041, use Form 2758 to request an extension of time to file.

(1) IRC 6324(a) imposes, by operation of law, a lien for the estate tax upon the gross estate of a decedent for a period of ten years from the date of death (excepting such part of the gross estate as is used for the payment of charges against the estate and expenses of administration, allowed by any court having jurisdiction thereof). This lien is a "silent" lien and is distinguished from many other types of tax liens in that no recordation is required.

(2) IRC 6324(b) imposes, by operation of law, a lien upon all gifts made during a period for which a gift tax return is filed and existing for a term of ten years from the date the gifts are made. Further, if the gift tax is not paid when due, the donee of any gift is personally liable for the gift tax due to the extent of the value of the gift. This lien, like the IRC 6324(a) lien, is also an unrecorded lien.

(3) Certain exceptions exist, and application may be made to IRS by the taxpayer for the discharge of specific items of property from the liens imposed under IRC 6324. This is most commonly encountered with respect to the statutory lien imposed with respect to estate tax underIRC 6324(a). If application is made on behalf of an estate, it must be filed by the personal representative of the estate, or a party properly authorized for representation pursuant to a valid power of attorney.

(4) Form 4422, Application for Certificate Discharging Property Subject to Estate Tax Lien, is submitted to request a discharge under IRC 6325(c). Form 792, United States Certificate Discharging Property Subject to Estate Tax Lien, is used to approve the discharge of specifically described property under IRC 6325(c).

(1) In any case where the Advisory Estate Tax Lien Group is called upon to process a request for a release of any of the estate tax liens specified in this section, or a discharge of specific property subject thereto or for the subordination of any of these liens, and the amount of the government’s lien interest cannot be determined, Advisory will consult with Estate and Gift for assistance in determining the amount of this interest.

(2) The Advisory Estate Tax Lien Group may submit requests for assistance to Estate and Gift using the SRS referral system. Estate and Gift will provide a written response within ten business days of receipt of the SRS referral.

(1) All lien and discharge request files processed by Advisory will be maintained by Advisory.

(2) Copies of lien discharge requests processed by Estate and Gift field groups, prior to fiscal year 2017, will be associated with the original return files.

(3) Form 792, United States Certificate Discharging property Subject to Estate Tax Lien, and relate material which may have been inadvertently retained by the Estate and Gift field groups, are subject to the same records destruction as Advisory. Refer to Document 12990, Records Control Schedule (RCS) 28, Item 44 (Job No. N1-58-93-2) on the National Archives and Records Administration (NARA) approved records disposition to prevent unauthorized/unlawful destruction of records. Also refer to IRM 1.15, Records and Information Management series for records creation, maintenance, retention and disposition guidance. Before any lien discharge is destroyed, current IDRS transcripts should be obtained to ensure that there is no balance owed on the account. Where such material remains in possession of a field Estate and Gift group, a best practice is to destroy only after the assessment SOL has expired and with assurance that there is no outstanding balance on the tax module.

(1) A return in which Letter 627, Estate Tax Closing Letter was issued after being "Accepted as Filed" or "Surveyed" can be opened for examination with the group manager’s approval. When making an examination determination regarding this type of return, the reopening criteria should be considered. The taxpayer should be advised of the reasons for the examination.

(1) The following procedures should be followed when reopening an examined case:

1. Requests must include a completed Form 4505, Reopening Memorandum, including a narrative.

2. Requests must be submitted via secure e-mail to the group manager for review. All attachments and additional information will be included in the same secure e-mail. Upon concurrence with the examiner’s determination the group manager will forward the e-mail to the Territory Manager for signature approval.

3. The Territory Manager will forward the completed electronic form to Chief, Estate and Gift, for signature.

4. The completed signed form will be returned to the Territory Manager.