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IRS Appeals Office Announces New Procedure

Estate Planning Journal

Under an IRS memorandum dated July 2, 2014 and effective as of September 2, 2014, the IRS Office of Appeals extended the number of days that must remain on the statute of limitations for assessment before the Office of Appeals will accept estate and gift tax cases from the examination division. Because of the new procedures, more taxpayers that owe estate and gift taxes must petition the tax court to seek an appeal of an IRS determination. This will most particularly affect cases where there has been a long drawn-out audit, such as valuation controversies.

Under the new procedure, the appeals office will not accept non-docketed estate cases if less than 270 days (365 days for gift tax cases) remain on the statute of limitations for assessment. There is an exception in estate cases where the Office of Appeals returns a case to the examination division for consideration of new information or a new issue. In these estate cases, there must be at least 180 days remaining on the statute of limitations for appeals to accept the returning case. The new procedures do not set forth an exception for gift tax cases. The statute of limitations cannot be extended in estate and gift tax cases. The new procedures do not change IRS practices or procedures regarding docketed cases.

Frank Baldino is an estate planning attorney who co-chairs Lerch, Early & Brewer’s Estate Planning & Probate group in Bethesda, Maryland. His focus is on protecting the assets of high net worth individuals to minimize federal and state tax liability. For more on the IRS' new procedure, contact Frank at (301) 657-0175 or fsbaldino@lerchearly.com.

This article originally appeared in the January 2015 edition of Estate Planning, a monthly periodical directed to estate planning professionals that offers readers the newest and most innovative strategies for saving taxes, building wealth, and managing assets.

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