Page 575 - TaxAdviser_2022

regulations issued in 2012, the final of time to elect portability for estates available to his or her surviving spouse or
regulations apply to estates of decedents not required under Sec. 6018(a) to file the spouse’s estate for application to the
dying on or after June 12, 2015. an estate tax return. surviving spouse’s transfers made on or
Under Sec. 2010(c), the basic exclu- Rev. Proc. 2017-34 extended the after the decedent’s date of death in ac-
sion amount is defined as $5 million, time available for the estate of a de- cordance with the rules prescribed under
adjusted for inflation each year after cedent to elect portability under the Regs. Secs. 20.2010-3 and 25.2505-2.
2011.27 The DSUE amount is the lesser simplified method to the later of Jan. However, if the increase in the surviving
of: (1) the basic exclusion amount; or 2, 2018, or the second anniversary of spouse’s applicable exclusion amount at-
(2) the excess of the applicable exclu- the decedent’s death. The IRS cited tributable to the addition of the decedent’s
sion amount of the surviving spouse’s the significant burden of processing DSUE amount causes the surviving spouse
last-deceased spouse over the amount the numerous requests by estates for or his or her estate to overpay gift or estate
with respect to which the tentative tax an extension of time to make a portabil- tax, no claim for credit or refund may be
is determined under Sec. 2001(b)(1) on ity election. made if the Sec. 6511(a) time for filing a
the estate of the deceased spouse.28 claim for credit or refund of a tax overpay-
In addition, the executor of the Additional relief in the new ment has expired. Rev. Proc. 2022-32
estate of the deceased spouse must revenue procedure includes a provision enabling an estate to
elect portability of the DSUE amount Rev. Proc. 2022-32 states that continuing file a protective claim for credit or refund
on a timely filed estate tax return, and relief is needed for estates that are not of tax in anticipation of relief under the
the return must include a computa- required to file an estate tax return, as the revenue procedure and provides three
tion showing how the amount was IRS continues to receive a considerable examples illustrating how to apply the
calculated.29 number of requests for extensions of time revenue procedure.
The due date for an estate tax return to elect portability, placing a significant Although Rev. Proc. 2022-32 is de-
on which a portability election is made burden on the agency. Further, the IRS signed to free up resources at the IRS to
is nine months after the date of death has observed that a significant percentage focus on more substantive matters, it also
or the last day of an extension period of the requests have come from estates relieves certain estates of the burden of
if an extension of time to file was ob- where the decedent has died within five having to file for a private letter ruling to
tained.30 An extension of time to elect years of the request date. Therefore, for request an extension of time to make a
portability will not be granted to an estates that are not required to file an portability election — at least if the estate
estate that must file an estate tax return estate tax return, the revenue procedure realizes within five years of the decedent’s
under Sec. 6018(a).31 But an extension extends the period under the simplified death that it may make the election by
to elect portability under Sec. 2010(c) method to obtain an extension of time to filing an estate tax return. If the estate fails
(5)(A) may be available under Regs. elect portability to on or before the fifth to realize this omission within five years
Sec. 301.9100-3 to an estate that is not anniversary of the decedent’s death. After of the decedent’s death, it can still request
required under Sec. 6018(a) to file an this period expires, a taxpayer may seek a private letter ruling to obtain relief for
estate tax return. relief by requesting a private letter ruling an extension of time to make a portability
under Regs. Sec. 301.9100-3. election. This revenue procedure does not
Previous relief for failure to timely If an estate that has obtained relief provide any relief, however, for estates that
elect portability under Rev. Proc. 2022-32 is later deter- were otherwise required to file a return
In Rev. Proc. 2014-18, the IRS provided mined to be an estate for which an estate under Sec. 6018(a).
a simplified method, available until tax return should have been filed under
Dec. 31, 2014, for obtaining an auto- Sec. 6018(a), the grant of an extension is Estate tax inclusion
matic extension of time to elect porta- deemed null and void ab initio. In Connelly,32 a district court held that
bility for estates of decedents that had If the decedent’s estate is granted when one of the two co-owners of a busi-
surviving spouses and were not required relief under Rev. Proc. 2022-32 and the ness died and the company received life
to file an estate tax return. Since Dec. estate tax return is considered timely insurance proceeds in connection with a
31, 2014, the IRS has issued numerous filed for purposes of electing portability, buy-sell agreement, those insurance pro-
private letter rulings granting extensions the DSUE amount of the decedent is ceeds should be counted in determining

27. Sec. 2010(c)(3). 30. Regs. Sec. 20.2010-2(a)(1).
28. Sec. 2010(c)(4). 31. Regs. Sec. 20.2010-2(a)(1).
29. Sec. 2010(c)(5). 32. Connelly, No. 4:19-cv-01410 (E.D. Mo. 9/21/21).

www.thetaxadviser.com November 2022 33