Tax Alert

• Jurisdiction: United States,Federal
• Author: By Elizabeth T. Pierson, Esq.*
• Publication year: 2021
• Citation: Vol. 27 No. 2

TAX ALERT

By Elizabeth T. Pierson, Esq.*

This article summarizes selected developments in federal and state taxation law since the last Quarterly that may be of interest to trust and estate attorneys.

I. FEDERAL ADMINISTRATIVE & LEGISLATIVE ACTIVITIES

A. Proposed User Fee for Estate Tax Closing Letters

Prop. Reg. REG-1146515-16; Prop. Reg. section 300.13, (Dec. 31, 2020)

The IRS has issued proposed regulations that would impose a user fee of $67 on requests for an IRS Letter 627, the estate tax closing letter. The IRS also plans to create a web-based process to request the letter and pay the fee. The fee would apply to requests received more than 30 days after the final regs are published in the Federal Register.

B. Procedure to Determine Penalty for Syndicated Easement Fraud

Chief Counsel Advice 202044009 and Chief Counsel Advice 202044010 (Dec. 2, 2020)

The IRS has announced that the standard concerning civil fraud penalties against a partnership that participated in a syndicated easement transaction is that the facts and circumstances establish a willful intent to evade tax at the partnership level.

C. Request for Comments - Marital Deduction and Non-Citizen Spouse

Treas. Notice, 85 Fed. Reg. 75414 (Nov. 25, 2020)

Treasury has submitted to OMB an extension of an information collection request with respect to the marital deduction for a non-citizen surviving spouse.

D. Request for Comments - QPRT Regs

IRS Notice, 85 Fed. Reg. 81284 (Dec. 15, 2020)

The IRS is seeking comments regarding the tax consequences of the sale of a residence from a QPRT. No changes are being made to the regs at this time.

E. Annual Rev. Proc. on Letter Rulings - User Fee Increases

Rev. Proc. 2021-1 (Jan. 4, 2021)

The IRS has announced increased user fees. Fees for requests for relief under section 301.9100-3 have increased to $12,600 beginning February 2, 2021. Fees for requests for letter rulings have generally increased to $38,000.

F. Annual Revenue Procedure on No-Rulings List

Rev. Proc. 2021-7 (Jan. 4, 2021)

The IRS issued its annual Revenue Procedure updating the list of issues on which it will not make advance letter rulings or letter determinations. The list broadens no-rulings on the consequences of irrevocable incomplete nongrantor trusts. Removed from the list is the issue of whether a split-interest charitable trust can avoid the private foundation excise tax rules by making a representation that no party has taken and no party will take a charitable deduction regarding the trust.

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