Article: Estate Tax Planning for Non-Resident Non-Citizen Decedents: Balancing Historical Frameworks with Modern Compliance.

Fabio Ambrosio (University of South Carolina at Aiken) recently published, Estate Tax Planning for Non-Resident Non-Citizen Decedents: Balancing Historical Frameworks with Modern Compliance., 2025. Provided below is an Abstract: 

This article revisits compliance challenges applicable to estates of non-resident non-citizen decedents with a dual emphasis on historical context and practical implications for the modern tax advisor.

Estates of decedents who, at the time of death, were neither residents nor citizens of the United States face unique compliance challenges under the current transfer tax system. These estates are subject to estate tax at the same graduated tax rates as estates of U.S. residents and citizens. However, while estates of U.S. residents and citizens are granted an exemption of $13,990,000, the exemption available to estates of non-resident non-citizens has remained $60,000 since 1976.

Tax returns of estates of non-resident non-citizens are filed on Form 706-NA. The most recent available IRS data on the filings of Form 706-NA date back to the period from 1999 to 2014, during which an annual average of 616 returns on Form 706-NA were filed nationwide and never more than 900 such returns were filed in a single year.

Considering that $60,000 in today’s dollars is the equivalent of only $11,000 in 1976, and that the most recent estimate of the non-immigrant population is 3,200,000, these figures suggest that many estates of non-resident non-citizens, even small ones, should be filing an estate tax return but are not doing so.

An estate tax return of a non-resident non-citizen decedent is required, regardless of whether any estate tax is due, in any one of the following three circumstances:

(1)  Where the sum of assets considered to be situated in the United States exceeds the filing threshold of $60,000.

(2)  Where the estate is claiming the benefit of a tax treaty.

(3)  In some cases where the transfer of assets under the control of a U.S. trustee or fiduciary requires a transfer certificate.

Notions of tax history insofar as the estates of non-resident non-citizens are concerned are essential to contextualize how each of the three filing requirements affects today’s tax advisers and which pitfalls to avoid in advising those clients who may have to file.