By Anne Rosivach
In an August 8, 2011, letter to the Internal Revenue Service (IRS)
, the American Institute of Certified Public Accountants (AICPA) requested a blanket extension of time to file the 2010 Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, and the 2010 Form 8939, Allocation of Increase in Basis for Property Acquired from a Decedent, for the estates of persons who died in 2010. The AICPA letter also asked the IRS to extend the time to pay any estate tax for 2010 as well as to extend the due date of the 2011 Form 706 for estates of 2011 decedents.
The AICPA asked for the extensions "because of the lateness of the issuance of the not yet finalized 2010 Form 706 and 2010 Form 8939 and the unique situation faced by executors of 2010 estates. In addition, a draft of the 2011 Form 706 has not yet even been circulated."
For estates of 2010 decedents, the due date for filing a Form 706 is September 19, 2011. The IRS released a draft of Form 706 on June 16.
November 15, 2011, is the due date for filing Form 8939, and Form 8939 has not yet been released. The IRS said it expects to issue Form 8939 and the related instructions early this fall.
The AICPA letter pointed out that the November 15 deadline gives executors of estates less than the ninety days promised by the IRS between the date the form is released and the date the form is due. In its Notice 2011-66
, the IRS also stated that estates are not permitted any extension of time to file Form 8939.
In its letter, the AICPA said that executors need time to study the final versions of both Form 706 and Form 8939 in order to make "informed choices as to whether or not to elect out of the estate tax regime and use the modified carry-over basis provisions of section 1022. . . . In addition, many practitioners use tax software to complete their forms. It will take time once the final versions of the forms are released for the software companies to develop the programs for completing these forms."
Regarding the estates of 2010 decedents, the AICPA suggested that the Treasury and the IRS announce the following:
- That the due date for Form 706 or Form 8939 will be ninety days after the issuance, in final form, of whichever of the two forms, together with its set of instructions, is issued last.
- That the due date for the payment of any estate tax is the same as the due date of Form 706. This would allow a reasonable period of time for the preparation and filing of either Form 706 or Form 8939, as promised by the Treasury Department and the IRS in IR-2011-33 with respect to Form 8939.
- That there be some procedure by which an estate can obtain an extension of time to file Form 8939 for a period of six months after its due date.
- That the due date for the 2011 Form 706 for 2011 decedents be no earlier than ninety days after the form and its instructions are released in final form.
The Economic Growth and Tax Relief Reconciliation Act of 2001 repealed the estate tax for persons who died in 2010, but the estate tax was reinstated for 2010 by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act. The recent law provided the option to file Form 8939, Allocation of Increase in Basis for Property Acquired from a Decedent as an alternative to the estate tax form. Filing of Form 706 or Form 8939 is required for estates with combined gross assets and prior taxable gifts exceeding $5 million or more for decedents dying in 2010 or later.