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BCLP Partner Stephanie Moll Interviewed with WealthManagement.com

BCLP Partner Stephanie Moll was interviewed in a WealthManagement.com article titled “Pre-Death Litigation Plagued the Estate of Sumner Redstone.” Moll discusses claims of elder abuse and diminished capacity in the estate planning context. The entire article can be found here.

IRS Publishes Guidance on COVID-19 Relief for Estate and Gift Taxes

The IRS has published a series of questions and answers that provide guidance with respect to COVID-19 relief for estate and gift taxes, which can be found here.

IRS extends more tax deadlines; EO operations affected during COVID-19 and more

Last month, the IRS announced that certain taxpayers generally have until July 15, 2020, to file and pay federal income taxes originally due on April 15. The IRS has extended this relief to additional returns, tax payments and other actions. As a result, the extensions generally now apply to all taxpayers that have a filing or payment deadline falling on or after April 1, 2020, and before July 15, 2020. The extensions apply to many forms and tax payments made by tax-exempt organizations, including:

  • Form 990-series annual information returns or notices (Forms 990, 990-EZ, 990-PF, 990-BL, 990-N (e-postcard))
  • Forms 8871 and 8872
  • Form 5227
  • Form 990-T
  • Form 1120-POL
  • Form 4720
  • Form 8976

See Notice 2020-23 and Rev. Proc. 2018-58 for more information, including a complete list of affected forms, tax payments and other time-sensitive actions.

IRS operations during COVID-19: mission-critical functions continue

In response to the coronavirus (COVID-19) crisis, the

Estate Tax Account Transcripts Available on IRS.gov

Estate tax transcripts can now be accessed online through the IRS website.

“The ability to access those transcripts online is a significant milestone in the Internal Revenue Service’s effort to reduce the number of estate tax closing letter requests and lessen its workload,” said Catherine Hughes, of the Treasury Department’s Office of Tax Policy.

Before June 1, 2015, the IRS issued an estate tax closing letter for every estate tax return filed.  For returns filed on or after that date, the IRS issues a closing letter only at the request of the estate.

In Notice 2017-12, issued in January 2017, the IRS stated that in lieu of closing letters, executors, local probate courts, state tax departments, and others can request an account transcript—a computer-generated report that includes the date on which

Court Orders Administrator To Elect Portability

The following was written by Luke Lantta of Bryan Cave’s fiduciary litigation team and originally posted here

When the IRS enacted the portability election provisions in 2011, which allowed estates of married taxpayers to pass along the unused part of their estate and gift tax exclusion amount to their surviving spouse, it remarked that it “expect[ed] that most estates of people who are married will want to make the portability election. . . .”  But, to elect portability, an estate tax return must be filed in order to pass along the exclusion.  So, what happens when an executorrefuses to elect portability?  Take them to court, of course.

NO AUTOMATIC CLOSING LETTER, BUT WAIT – THERE ARE ALTERNATIVES

IRS Notice 2017-12

The Service issued FAQs in June of 2015 to let practitioners know that they were no longer routinely issuing closing letters. The Service instructed practitioners that they would now have to request such a closing letter, but could not do so until 4 months after filing the estate tax return. Their goal was to reduce the amount of work the Service needed to complete as a cost cutting measure. However, taxpayers need closure and the requests for closing letters almost became routine. Because so many practitioners were routinely requesting closing letters, the Service let it be known informally, with a posting on its website, that a transcript could be requested, and would be an acceptable substitute for an estate tax closing letter. But requesting such a transcript has not been a simple matter, with many groans of frustration along the way. The Service has now provided guidance

Recent Tax Court Case Rules on Treatment of Madoff Account

Recent Tax Court Case Rules on Treatment of Madoff Account

October 3, 2016

Authored by: Stacie J. Rottenstreich and Karin Barkhorn

In a recent Tax Court decision, Harry H. Falk, and Steven P. Heller, Co-Executors, v. Commissioner of the Internal Revenue, the United States Tax Court ruled that in the case of the Madoff Ponzi scheme, an estate which paid estate tax on Madoff assets which subsequently have become worthless can claim a theft deduction.

James Heller, a New York state decedent, died in January 2008 owning a 99% interest in James Heller Family, LLC (the “LLC”).  The only asset held by the LLC was an account with Bernard L. Madoff Investment Securities, LLC.  In November of 2008, the Executors of Mr. Heller’s estate withdrew some money from the LLC’s Madoff account in order to pay estate taxes and other administrative expenses.  Shortly thereafter, the news of the Madoff Ponzi scheme became public. Suddenly, the LLC’s interest and the estate’s interest in the LLC became worthless.

In April 2009, the Executors

IRS: Transcript Can Be Alternative to Estate Tax Closing Letter

Back in August, we wrote about how the IRS would no longer automatically issue closing letters for filed Form 706, United States Estate (and Generation-Skipping Transfer) Tax Returns.  Instead, the IRS will only issue closing letters upon request by the taxpayer.

However, on December 4, the IRS updated its Frequently Asked Questions on Estate Taxes website to provide estates with an alternative to requesting and obtaining an IRS closing letter:

“Account transcripts, which reflect transactions including the acceptance of Form 706 and the completion of an examination, may be an acceptable substitute for the estate tax closing letter.”

Further, transcripts are easily available:

“Account transcripts are available online to registered tax professionals using the Transcript Delivery System (TDS) or to authorized representatives making requests using Form 4506-T.”

Changes in the Final Portability Regulations

Changes in the Final Portability Regulations

July 10, 2015

Authored by: Andrew Bleyer and Doug Stanley

ThinkstockPhotos-176603977The IRS issued final regulations for electing portability and use of a deceased spousal unused exclusion amount (DSUE) on June 12, 2015. Though the final regulations are fairly technical, they are worth understanding as applying them correctly can mean a $5,430,000 difference in the amount that passes through an estate tax free. The final regulations adopt the temporary regulations that were issued in 2012, with several changes and clarifications:

1. Upon request, the proposed regulations allowed for an extension of time to elect portability for those estates that did not meet the requirements for an automatic extension. It was unclear whether estates that exceed the basic exclusion amount (currently $5,430,000 indexed for inflation) could request such an extension because the filing deadline for such estates is prescribed by statute and thus cannot be

Treasury Green Book Proposal: Definition of Executor

459482489The Treasury Green Book provides explanations of the President’s budget proposals.  One such proposal (remember…these are just proposals, not actual changes in the law) that may affect your estate planning is found on page 206 of the Green Book and is re-printed here for your convenience:

EXPAND APPLICABILITY OF DEFINITION OF EXECUTOR

Current Law

The Code defines “executor” for purposes of the estate tax to be the person who is appointed, qualified, and acting within the United States as executor or administrator of the decedent’s estate or, if none, then “any person in actual or constructive possession of any property of the decedent.” This could include, for example, the trustee of the decedent’s revocable trust, an IRA or life insurance

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