IRS Provides Relief for Estates that Failed to Elect Portability

Due to lack of early information and guidance by the IRS regarding the portability election and how it is made, the IRS has granted relief to some estates that failed to file an estate tax return or extension thereof in a timely manner. In Notice 2012-21, the IRS has granted the executor of a “qualifying estate” that failed to timely request an extension to file an estate tax return the opportunity to obtain a six-month extension of time until 15 months after the decedent’s date of death. A “qualifying estate” is an estate in which (i) the decedent is survived by a spouse, (ii) the decedent’s date of death is after December 31, 2010 and before July 1, 2011, and (iii) the fair market value of the decedent’s gross estate does not exceed $5,000,000. In order to utilize the relief granted, an executor must file a Form 4768 with the IRS office designated in the instructions to the form within 15 months of the decedent’s date of death. In addition, the executor must enter at the top of the Form 4768 the notation “Notice 2012-21, Extension for Good Cause Shown” or otherwise sufficiently notify the IRS that the extension is being filed pursuant to Notice 2012-12.

Notice 2012-21 can be found at: http://www.irs.gov/pub/irs-drop/n-12-21.pdf .

© 2012 Parsonage Vandenack Williams LLC

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