| Instructions for Form 4768 |
2006 Tax Year |
This is archived information that pertains only to the 2006 Tax Year. If you
are looking for information for the current tax year, go to the Tax Prep Help Area.
Forms 706 and 706-NA.
The due date for Form 706 and Form 706-NA is 9 months after the date of the decedent's death. If there is no numerically
corresponding date in the
9th month, the due date is the last date of the 9th month.
Form 706-A.
Form 706-A is due 6 months after the taxable disposition or cessation of qualified use.
Form 706-D.
Form 706-D is due 6 months after the taxable disposition, cessation of material participation, or disqualifying act.
Form 706-QDT.
Form 706-QDT is due:
-
On or after January 1 but not later than April 15 of the year following any calendar year in which a taxable event occurred,
or
-
Nine months after (a) the death of the surviving spouse, or (b) the failure of the trust to qualify as a Qualified Domestic
Trust
(QDOT).
Note.
If the due date falls on a Saturday, Sunday, or legal holiday, the return is due on the next business day.
Part II. Extension of Time To File Form 706, 706-A, 706-D, 706-NA, or 706-QDT (Section 6081)
Automatic extension.
An executor may apply for an automatic 6-month extension of time to file Form 706, 706-A, 706-D, 706-NA, or 706-QDT.
Unless you are an executor out
of the country (see below), the maximum extension of time to file is 6 months from the original due date of the applicable
return. Check the
designated box and complete the form as instructed.
You do not have to explain why you are asking for an automatic extension. However, you must file Form 4768 by the
original due date of the
applicable return. We will contact you only if your request is denied. Keep a copy of the form for your records.
Note.
An extension of time to file does not extend the time to pay.
Additional extension.
If you are an executor out of the country, you can apply for an additional extension of time to file in excess of
the automatic 6-month extension.
Check the designated box, complete the form as instructed, and attach the statement described in Part II. For Forms 706-A,
706-D, and 706-QDT, the
qualified heir or trustee/designated filer must also include the date and a description of the taxable event.
You should apply for an automatic 6-month extension and then apply for any additional extension. You cannot combine
an application for an automatic
extension and an additional extension on the same Form 4768.
Applications for an additional extension following an automatic extension should be filed early enough to give the
IRS time to consider the
application before the due date.
Note.
We will contact you only if your request is denied. Keep a copy of the form for your records.
Under Regulations section 20.6081-1(c), an executor who failed to timely apply for an automatic 6-month extension of time
to file Form 706 may
still apply for an extension of time to file upon a showing of good and sufficient cause.
If you are applying for an extension for cause, you must:
-
Complete Part I;
-
Sign the declaration (on the appropriate line) at the bottom of Form 4768 under penalties of perjury, and if applicable, check
the box(es)
that apply(ies); and
-
Attach a written statement explaining in detail why:
-
You were unable to request an automatic extension,
-
It is impossible or impractical to file Form 706 by the due date, and
-
You should be granted an extension at this time.
Unless the executor is out of the country, the requested extension cannot be for more than 6 months from the original due
date of the Form 706.
Note.
We will contact you only if your request is denied. Keep a copy of the form for your records.
If a form on extension is not required to be filed after an extension of time to file has been granted.
If you have been granted an automatic extension, additional extension, or extension for cause, and it is later determined
that you are not required
to file the form extended (that is, Form 706, 706-A, 706-D, 706-NA, or 706-QDT), you should write a letter to the Internal
Revenue Service Center
listed under Where To File on page 2, stating that no return is required for the estate. Sending this letter should eliminate any further
correspondence with the IRS. Please include with your letter a copy of the Estate's Probate Inventory and Appraisement.
Part III. Extension of Time To Pay (Section 6161)
An extension of time to pay (section 6161(a)(1)) may not exceed twelve months. A discretionary extension of time to pay for
reasonable cause
(section 6161(a)(2)) may be granted, for 1 year at a time, for up to a maximum of ten years. A discretionary extension of
time to pay a deficiency for
reasonable cause (section 6161(b)(2)) may be granted, for 1 year at a time, up to a maximum of 4 years. Different extension
periods may apply to
extensions of time granted for a section 6163 election (reversionary or remainder interest) or a section 6166 election (closely
held business).
The application must establish why it is impossible or impractical for the executor to pay the full amount of the estate tax
by the estate tax
return due date. Examples of reasonable cause provided in Regulations section 20.6161-1 include the following.
-
An estate includes sufficient liquid assets to pay the estate (and GST) tax when otherwise due. The liquid assets, however,
are located in
several jurisdictions and are not immediately subject to the control of the executor. Consequently, such assets cannot readily
be collected by the
executor even with reasonable effort.
-
An estate is comprised, in substantial part, of assets consisting of rights to receive payments in the future (for example,
annuities,
copyright royalties, contingent fees, or accounts receivable). These assets provide insufficient present cash with which to
pay the estate (and GST)
tax when otherwise due and the estate cannot borrow against these assets except upon terms that would cause a loss to the
estate.
-
An estate includes a claim to substantial assets which cannot be collected without litigation. Consequently, the size of the
gross estate is
unascertainable at the time the tax is otherwise due.
-
An estate does not have sufficient funds (without borrowing at a rate of interest higher than that generally available) with
which to pay
the entire estate (and GST) tax when otherwise due, to provide a reasonable allowance during the remaining period of administration
of the estate for
the decedent's surviving spouse and dependent children, and to satisfy claims against the estate that are due and payable.
In addition, the executor
has made a reasonable effort to convert assets in the executor's possession (other than an interest in a closely held business
to which section 6166
applies) into cash.
In general, an extension of time to pay will be granted only for the amount of the cash shortage. You must show on Part IV
the amount of the estate
(and GST) tax (attach a copy of the return if it has already been filed; otherwise estimate the tax), the amount of the cash
shortage, including a
statement of the current assets already distributed, a plan for partial payments during the extension period, and the balance
due. To avoid penalties
and additional interest, you must pay any balance due with this form.
To assist us in processing the return, read the bulleted items, check the appropriate box, and enter the extension date you
are requesting in the
box indicated.
The part of the estate tax for which the extension is granted must be paid with interest from the estate tax due date before
the expiration of the
extension granted.
Note.
An extension of time to pay does not extend the time to file.
Application Denied—Appeal Rights
If your application for extension of time to pay is denied, you may file a written appeal with the IRS. To file an appeal,
you must:
-
Send your appeal to the following address:
Internal Revenue Service Center
201 West Rivercenter Blvd.
Stop 824G
Covington, KY 41011
-
Send your appeal by registered or certified mail, and
-
File your appeal within 10 days after the denial is mailed to the executor.
The appeal is considered filed on the date it is postmarked if postmarked timely but received after the 10-day period. If
the due date falls on a
Saturday, Sunday, or legal holiday, file by the next business day.
Part IV. Payment To Accompany Extension Request
Interest must be paid on any estate (and GST) tax that is not paid in full by the original due date of the tax return, regardless
of whether an
extension of time to file and/or pay has been obtained. For this reason, you should pay as much of the tax as possible by
the original (not extended)
due date of the return.
Paying the tax.
Make the check or money order payable to the “ United States Treasury.” Write the decedent's (or qualified heir's) social security number on
the payment and the type of return (for example, “ Form 706”).
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