IRS Changing Rules Dealing With Estate Closing Letters

For the few households that pay Federal estate taxes the estate closing letter is an essential step in the estate administrative process.  The Closing Letter is the formal letter that is sent out by the IRS that confirms they reviewed and agreed to the estate’s Form 706 estate tax return.  The IRS has recently announced that it will no longer automatically issue estate tax closing letters.  Under the new rules the taxpayer will need to explicitly request the closing letter after at least a 4-6 month waiting period after the Form 706 is filed.  These new rules could force taxable estates to stay open longer causing delays in distributions for beneficiaries and increases in administrative costs.  

See Michael Kitces, New IRS Change Will Require Estates To Request An Estate Closing Letter, Nerd’s Eye View, September 30, 2015.