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IRS Estate Tax Transcript in Lieu of Closing Letter

Posted on: March 22nd, 2017
question closed estatesThe Internal Revenue Service (IRS) recently issued Notice 2017-12 describing new procedures for closing federal estate tax returns. 

Our tax attorneys outlined changes to estate tax closing letter procedures a few years ago, which apply to all estate tax returns filed on or after June 1, 2015. At the time, the IRS had released a new rule amending the process for letter delivery. Previously, estate tax closing letters were automatically mailed within approximately 6 months following the filing of the return, provided errors were not found. The new procedure requires the taxpayer to formally request the letter; however, at the time the rule was announced the proper request process was not noted.
 
Almost two years later, the IRS released guidance on acceptable confirmation of a closed estate tax return. The IRS issues account transcripts with code “421” to indicate review and acceptance of the return. Until the IRS’ recent formal notice, executors and probate courts have relied on closing letters to finalize estate administration. Now IRS estate tax transcripts with code “421” may be accepted by probate courts as evidence that the federal estate tax return file has been closed. Transcripts require no fee.

Notice 2017-12 also includes a reminder that notice of accepted returns does not indicate permanent exemption from further review:

An estate tax closing letter, however, is not a formal closing agreement…its issuance does not prevent the IRS from reopening or reexamining the estate tax return to determine estate tax liability.

To request an account transcript:
 

To request an estate tax closing letter:
 
  • Call 866.699.4083. Only phone requests are currently available.

For both methods above, representatives must wait at least four months after filing the estate tax return to request a transcript or closing letter.

For executors or estate representatives seeking clarity or additional guidance with preparing and filing estate tax returns, schedule a consultation with one of our tax attorneys. 
 
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