On January 27, 2014, the Internal
Revenue Service issued Rev. Proc. 2014-18 which provides a simplified method
for certain taxpayers to obtain relief for an extension of time under Section
301.9100-3 of the Procedure and Administration Regulations to make a
“portability” election under Section 2010(c)(5)(A) of the Internal Revenue
Code. Relief is available for estates of
decedent’s who died in 2011, 2012, and 2013, provided certain eligibility and
procedural requirements are satisfied.
Rev. Proc.
2014-18 applies only if the taxpayer is the executor of an estate of a decedent
who (i) has a surviving spouse, (ii) died after December 31, 2010, and on or
before December 31, 2013, and (iii) was a citizen or resident of the Unites
States on the date of death. In
addition, the taxpayer must not have been required to file an estate tax return
pursuant to Section 6018(a) of the Code, and the taxpayer did not file an
estate tax return with the time prescribed by Temporary Regulation Section
20.2010-2T(a)(1).
To obtain
relief pursuant to Rev. Proc. 2014-18, the following procedural requirements
must be followed. First, a person
permitted to make the election on behalf of a decedent must file a complete and
properly-prepared United States Estate (and Generation-Skipping Transfer) Tax
Return (Form 706) on or before December 31, 2014. Second, the Form 706 must state at the top
that the return is being “FILED PURSUANT TO REV. PROC. 2014-18 TO ELECT
PORTABILITY UNDER SECTION 2010(c)(5)(A).”
If the requirements for granting relief pursuant to Rev. Proc. 2014-18
have been satisfied, the taxpayer will be deemed to have met the requirements
for relief under Section 301.9100-3 and relief is granted under the provisions
of Section 301-9100.3 to extend the time to elect portability under Section
2010(c)(5)(A).
Estates
that do not meet the eligibility requirements may still seek relief by filing a
letter ruling request pursuant to Section 301-9100-3.
For more
information, please contact Jason Marx at (973) 535-0500 or email him at
jmarx@connellfoley.com.
