January 31, 2014
David First, Partner-in-Charge of Trusts and Estates Practice Group, Featured in Bloomberg BNA Article, "Advisers Applaud Extension of Deadline for Filing Portability, Say it Will Affect Many."
By Diane Freda
Reaction to the Internal Revenue Service's recent announcement that it would extend the filing deadline for claiming portability was roundly applauded by practitioners, who said it will give those who missed the deadline more time to file the form and claim a decedent's unused estate tax exclusion amount.
“The portability extension is important because it affects quite a large number of people,” David First, the partner in charge of the Trusts and Estates Practice Group at Marcum LLP, told Bloomberg BNA Jan. 30.
“This is a great opportunity for those estates that could have elected portability, but didn't for whatever reason, to get a second bite at the apple, potentially saving the family a significant amount of money,” First said.
Some taxpayers may not have done the proper planning to utilize their estate tax exemptions, he said. They may have been ignorant of the law, which has changed dramatically over the last several years.
In some instances there is an unwillingness to pay for professional advice, he said, and many don't pursue estate planning guidance because there are family issues they don't want to face, or they are avoiding their own mortality.
In other cases, the accountant or attorney that was consulted wasn't familiar with the rules regarding portability, since even seasoned professionals have been confused about it.
The due date of an estate tax return required to elect portability is nine months after the decedent's death or the last day of the period covered by an extension, First said.
“Needless to say there have been many instances where returns were not filed and elections not made causing the loss of opportunity to retain portability,” First said.
“There were relief provisions that taxpayers could avail themselves of to obtain an extension of time to file the Form 706, but they were cumbersome and probably expensive,” First said. The IRS believed that a simplified method should be available to obtain an extension of time to elect portability, and that is what they granted.
Under the revised IRS procedure, if the estate meets certain requirements, blanket relief is available for estates of decedents who died in 2011, 2012 and 2013, if the estate wasn't required to file an estate tax return.
The IRS will allow these estates until Dec. 31, 2014, to file a return to elect portability.