On April 28, 2020, the Internal Revenue Service issued additional guidance on how the recent postponement of filing deadlines affect gift tax returns, estate tax returns and various associated items. The guidance, in the form of questions and answers, verified that estate tax returns and gift tax returns normally due on or after April 1, 2020, and before July 15, 2020, are now not due until July 15, 2020. Similarly, qualified disclaimer deadlines that normally expire on or after April 1, 2020, and before July 15, 2020, are postponed until July 15, 2020. The IRS has similarly postponed deadlines for requesting refunds of gift, estate, or generation skipping tax, for making a portability election, and for allocating Generation Skipping Transfer tax.
The guidance also explains postponement of deadlines for Form 8971 and furnishing Schedule A, Information Regarding Beneficiaries Acquiring Property from a Decedent. The postponed due date depends on the due date, and filing date, of the associated Estate Tax Return. Generally, for returns filed or due after March 1 and before July 15, there is at least a 30-day filing deadline postponement.
The postponement also applies to the due date for filing a previously extended Estate Tax return whose extended due date is on or after April 1, 2020, and before July 15, 2020. However, the IRS has not postponed the payment date for tax due before April 1, 2020. Therefore, in this scenario if the Estate Tax return when filed shows unpaid liability, interest on the underpayment will be calculated from the original return due date until the date of payment. Given the importance of meeting IRS deadlines, and the variable due dates for estate tax return items, a careful review of the IRS guidance is recommended when determining current filing deadlines for gift and estate tax returns and associated election.
The new guidance can be found at https://www.irs.gov/businesses/small-businesses-self-employed/covid-19-relief-for-estate-and-gift.