IRS Notice 2017-12: Guidance Relating to the Availability and Use of an Account Transcript as a Substitute for an Estate Tax Closing Letter

In Notice 2017-12, the IRS clarifies that an IRS account transcript is a substitute for an estate closing letter.  Estates and their authorized representatives can request an account transcript at no cost, by filing Form 4506-T, Request for Transcript of Tax Return.

See https://www.irs.gov/pub/irs-drop/n-17-12.pdf

Prior to June 1, 2015, executors, courts, state taxing departments, tax preparers and attorneys relied on the estate tax closing letter (Letter 627) to confirm that the IRS had either completed their examination of the estate tax return or closed their file.

After June 1, 2015, the IRS changed it’s policy and indicated that an estate tax closing letter would only be provided if requested and providing that the request was made four months after the filing of the estate tax return.

Notice 2017–12 now provides clarification for practitioners and others alike that we may use an account transcript as a substitute for a tax closing letter.  The IRS notes that if an account transcript shows a transaction code of 421 and the explanation “Closed examination of tax return,” then this code can act as an equivalent of a tax closing letter.

Similar to an estate closing letter, an account transcript with a 421 code is not a formal closing agreement and as such does not prevent the IRS from reopening or re-examining an estate tax return as set forth in Rev. Proc. 2005-32.  As set forth in the notice, and as provided in § 2010(c)(5)(B) and §§ 20.2010-2(d) and 20.2010-3(d), the IRS may examine the estate tax return of the decedent after issuance of a closing letter or 421 transcript for the purpose of determining the transfer tax liability of the surviving spouse or the decedent when portability has been elected.

Again, the IRS has indicated that a transcript may be obtained by filing a Form 4506-T, Request for Transcript of Tax Return.  The request should be made no earlier than four months after the filing of the estate tax return.

In the notice, the IRS also has provided a phone number at the IRS – (866) 699-4083 to request an estate tax closing letter.  The request should be made no earlier than four months after the filing of the estate tax return.

This new procedure should provide clarity and some peace of mind for accountants, estate attorneys, probate courts and personal representatives alike.

The following is for informational purposes only, shall not constitute legal advice and does not constitute the establishment of an attorney-client relationship.  More importantly, the following information is not a substitute for a Board Certified Texas Estate Planning & Probate Attorney. You should always consult with a qualified attorney.

Find more at www.wrightprobate.com. A website of the Wright Firm, LLP network www.thewrightlawyers.com.

Why Use A Texas Board Certified Estate Planning & Probate Attorney?

lawyer-image

I have to admit up front that I’m a Texas Board Certified Estate Planning & Probate Attorney. I’m also a CPA. Like the CPA exam – only the strong survive the Board Certification process. Yes, it is hard to quality and even after you have the professional relationships and experience, the exam is really hard. I believe that Board Certified Attorneys are like the Jedi Knights of the legal profession. In an age of DIY and form services we select few are dedicated to the “craft” of law.

The Answer – why would you not want to Use a Texas Board Certified Estate Planning and Probate Attorney.

Consider the following facts from the Texas Board of Legal Specialization:

• There are more than 100,000 attorneys licensed to practice in Texas. Only 7,450 are Board Certified.
• Only Board Certified lawyers earn the right to publicly represent themselves as a specialist in a select area of the law. In fact, they are the only attorneys allowed by the State Bar of Texas to do so. This designation sets them apart as being an attorney with the highest, public commitment to excellence in their area of law.
• The process is voluntary and can only take place after an attorney has been in practice for five years, with a minimum of three years experience in the specialty area.
• Board Certification is not a one-time event. It requires an ongoing involvement in the specialty area which is periodically substantiated with references from peers in that field. It also requires annual professional refreshment through Texas Board of Legal Specialization approved, continuing legal education course work to stay abreast of current trends in law.

See http://www.tbls.org/. Also, see this site to find a Texas Board Certified Attorney.

The following is for informational purposes only, shall not constitute legal advice and does not constitute the establishment of an attorney-client relationship. More importantly, the following information is not a substitute for a Board Certified Texas Estate Planning & Probate Attorney. You should always consult with a qualified attorney.
Find more at http://www.wrightprobate.com. A website of the Wright Firm, LLP network http://www.thewrightlawyers.com.