CPAs push for further changes to estate laws

Near the end of January, the American Institute of Certified Public Accountants reached out to the IRS and the U.S. Treasury Department. It asked for clarification on tax reporting rules that affect many estates and beneficiaries in California and the rest of the nation. It also made a few recommendations of its own on ways the government might rework the tax system.

The AICPA told the IRS it shouldn't require draft Form 8971, or Information Regarding Beneficiaries Acquiring Property from a Decedent, from taxpayers who file Form 706, or U.S. Estate (and Generation-Skipping Transfer) Tax Return, just to elect portability. Currently, executors and other parties that must file Form 706 use Form 8971 to compute how to report their property values to the IRS. The AICPA also pushed for executors being able to list trusts as beneficiaries in order to receive Schedule A and asked that Form 8971 instructions clarify how to determine basis after filing Form 706.

AICPA's second letter pertained to Notice 2015-57, an IRS supplement to the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015. It made requests for clarification on a number of matters, such as the manner in which the IRS applies penalties, how to deal with absent beneficiaries at the date of death, assigning trusts as beneficiaries and excluding exempt beneficiaries from the need to receive estate statements.

New estate tax laws may go through multiple iterations before their finalization. These changes could impact the legality of actions taken by executors, and though most modifications are usually not retroactive, they could still catch executors who get used to doing things a certain way off guard. Executors may find that Estate administration may be easier with the assistance of an experienced attorney.

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