The IRS continues its apparent push to get out of the business of issuing closing letters for estates by issuing guidance in Notice 2017-12 that states that estates and their authorized representatives can request an account transcript in lieu of a closing to confirm that an IRS examination of the estate is completed and closed.
Back in mid-2015 the IRS stopped routinely issuing estate closing letters. As the notice explains:
Prior to June 1, 2015, the IRS issued an estate tax closing letter for every estate tax return filed (except in the case of an estate tax return filed for the purpose of electing portability under § 2010(c)(5)(A) when the estate had no filing requirement under § 6018(a) and the portability election was denied). However, for estate tax returns filed on or after June 1, 2015, the IRS changed its policy and now will issue an estate tax closing letter only at the request of an estate, which request is to be made at least four months after the filing of the estate tax return.
The notice points out that various parties in the past (including executors and probate courts) have relied upon closing letters to confirm that the IRS has completed its examination of the estate and the IRS file has been closed. While noting that closing letters may still be obtained, though only upon specific request, a transcript may substitute for the closing letter. The notice also points out the transcript is available at no charge.
The notice gives the following explanation of a transcript:
An account transcript is a computer-generated report that provides current account data. The information reported on an account transcript includes, but is not limited to, the return received date, payment history, refund history, penalties assessed, interest assessed, the balance due with accruals, and the date on which the examination was closed. An account transcript presents this account data by including transaction codes together with the descriptions of those codes. An account transcript that includes transaction code "421" and the explanation "Closed examination of tax return" indicates that the IRS's examination of the estate tax return has been completed and that the IRS examination is closed. Thus, the issuance of an estate tax closing letter and the entry of code "421" on the estate's account transcript each independently confirms that the IRS's examination of the estate tax return has been completed, and may be reopened to determine the estate tax liability of a decedent only in the circumstances described in both the closing letter and Rev. Proc. 2005-32. Accordingly, an account transcript showing a transaction code of "421" can serve as the functional equivalent of an estate tax closing letter.
The notice goes on to give the details of how the transcript can be requested:
Estates and their authorized representatives may request an account transcript by filing Form 4506-T, Request for Transcript of Tax Return. Currently, Form 4506-T can be filed with the IRS via mail or facsimile (per the instructions on the form). Although account transcripts for estate tax returns are not currently available through the IRS's online Transcript Delivery System, the IRS website, www.irs.gov, will have current information should an automated method become operational. To allow time for processing the estate tax return, requests should be made no earlier than four months after filing the estate tax return.
The IRS will continue to issue estate closing letters on request and the notice concludes by giving information on that process:
For those who wish to continue to receive estate tax closing letters, estates and their authorized representatives may call the IRS at (866) 699-4083 to request an estate tax closing letter no earlier than four months after the filing of the estate tax return.