Treasury Decision 10055, RIN 1545-BS10, Sept. 25, 2026

The Department of the Treasury and the Internal Revenue Service (IRS) have issued Final Regulations (Treasury Decision 10055, RIN 1545-BS10) amending 26 CFR Part 300 to increase the user fee charged to authorized persons requesting IRS Letter 627, commonly referred to as an estate tax closing letter. This regulatory action adopts without change the proposed regulations (REG-103193-26) published on June 2, 2026 (91 FR 32909). The final rule establishes a revised user fee of $76 per request, representing an increase from the $56 fee established in 2025.

An estate tax closing letter provides verification from the IRS that the estate tax return (Form 706, United States Estate and Generation-Skipping Transfer Tax Return) has been accepted, confirming either the net estate tax liability, discharge from personal liability under Internal Revenue Code (IRC) § 2204, or the final settlement of audit determinations. For estate planning professionals, tax practitioners, CPAs, and corporate fiduciaries, obtaining Letter 627 is a critical administrative step in closing probate estates, distributing assets to beneficiaries, and securing final discharge of local liability.

Statutory Authority and Federal User Fee Framework

The legal foundation for the fee modification rests upon the Independent Offices Appropriations Act of 1952 (IOAA), codified at 31 U.S.C. § 9701. Under the IOAA, Congress granted federal agencies express statutory authority to establish user fees for agency services, establishing the broad policy that federal services conferring specific private benefits should be self-sustaining to the extent possible.

The implementation of the IOAA is governed by executive policy set forth in Office of Management and Budget (OMB) Circular A-25, 58 FR 38142 (July 15, 1993). In justifying the fee, the IRS underscores that under OMB Circular A-25, when a service offered by a federal agency “confers special benefits on identifiable recipients beyond those accruing to the general public,” the agency is required to establish a user fee that recovers the full cost of providing that service, unless a specific statutory or executive exception applies.

In its rationale, Treasury reaffirms its long-standing administrative position that “the issuance of an estate tax closing letter constitutes the provision of a service and confers special benefits to authorized persons requesting such letters beyond those accruing to the general public.” Because the closing letter provides private estate personal representatives and beneficiaries with formal confirmation of closing and liability discharge beyond general tax administration, full cost recovery is mandatory under OMB Circular A-25. Furthermore, Section 8(e) of OMB Circular A-25 mandates that federal agencies conduct biennial reviews of user fee programs to ensure charges are adjusted to accurately reflect changes in operating costs.

Historical Trajectory of Closing Letter Fees

Prior to 2021, the IRS issued estate tax closing letters to eligible estates upon request at no direct user charge. On September 28, 2021, Treasury and the IRS promulgated final regulations (TD 9957, 86 FR 53539) establishing an initial user fee of $67 per request, derived from a 2019 Cost Model.

Following a subsequent biennial cost review, Treasury and the IRS issued an interim final rule (TD 10031, 90 FR 21410) on May 20, 2025, followed by final regulations (TD 10038, 90 FR 55041) on December 1, 2025. Based on the 2023 Cost Model, those regulations reduced the closing letter user fee from $67 to $56.

The 2025 biennial review resulted in the creation of the 2025 Cost Model. That analysis demonstrated that changes in operational volume, employee compensation, and institutional overhead shifted the full cost per request upward to $76, prompting the current rulemaking under REG-103193-26 and TD 10055.

Revisions, Additions, and Deletions to the Regulations

A central element of TD 10055 is that the Treasury Department and the IRS made zero substantive revisions to the proposed text prior to adoption. The IRS explicitly stated: “After careful consideration of the comment received, the Treasury Department and the IRS adopt the text of the proposed regulations without change.”

The specific regulatory additions and deletions located within 26 CFR Part 300 are as follows:

Modification to 26 CFR § 300.12(b) (Fee Amount): The prior regulation specified that “The fee for issuing an estate tax closing letter is $56.” In TD 10055, paragraph (b) is amended by deleting “$56” and inserting “$76”, officially establishing the $76 charge.
Modification to 26 CFR § 300.12(d) (Applicability Date): Paragraph (d) previously referenced the applicability date of the prior $56 fee regulation. In TD 10055, paragraph (d) is deleted and replaced to provide that the section applies to requests for estate tax closing letters received by the IRS after the date that is 30 days following the date of publication of the final regulations in the Federal Register.

No other paragraphs of 26 CFR § 300.12 were added, removed, or amended.

Managerial Cost Accounting Standards and Full Cost Calculation

To justify the fee increase to $76, the IRS executed a managerial cost accounting evaluation in accordance with Generally Accepted Accounting Principles (GAAP) as promulgated by the Federal Accounting Standards Advisory Board (FASAB). Specifically, the IRS followed Statement of Federal Financial Accounting Standards No. 4: Managerial Cost Accounting Standards and Concepts (SFFAS No. 4).

The full cost calculation incorporates three distinct structural components: direct processing labor, quality assurance review, and allocable agency overhead.

Request Processing Cost Structure

Requests for estate tax closing letters (processed via Form 673 on pay.gov) are handled by IRS personnel within the Small Business/Self-Employed (SB/SE) Examination division at General Schedule (GS) levels GS-5, GS-8, and GS-11. Reviewing the Form 706 return, creating Letter 627, and preparing the dispatch requires approximately 0.65 direct staff hours per request.

Based on historical data from Fiscal Years (FY) 2023 and 2024, the IRS processed an annual average of 8,053 requests, requiring 5,234 direct staff hours annually. Pursuant to internal campus costing standards, direct labor hours are multiplied by a 60 percent indirect employee rate to account for non-direct campus staff support, adding 3,140 indirect hours for a total of 8,374 annual processing hours.

Converting total annual hours by the standard 2,080 annual hours worked by a full-time equivalent (FTE) yields 4.03 FTEs. The processing labor distribution spans three GS pay grades: GS-5 (36.85%), GS-8 (35.82%), and GS-11 (27.33%). Multiplying each grade’s blended salary and benefits cost by its operational time percentage yields a weighted average cost of $92,812 per FTE. Multiplying $92,812 by 4.03 FTEs establishes a direct processing labor and benefits cost of $374,032.

Quality Assurance Review Cost Structure

To verify that issued letters are authorized, accurate, and correctly addressed, the IRS conducts quality assurance (QA) reviews on a representative sampling. During FY 2023 and FY 2024, the IRS reviewed 48 estates (an annual average of 24 estates). Quality assurance professionals spend 0.5 hours per letter (generally three letters per estate), generating 36 direct staff hours. Applying the 60 percent campus indirect rate adds 22 indirect hours, totaling 58 staff hours, or 0.03 FTEs.

QA reviews are performed by personnel under the IRS Payband System at paybands IR-10 (25%) and IR-06 (75%), with an average salary and benefits cost of $127,256 per FTE. Multiplying $127,256 by 0.03 FTEs results in a total QA labor and benefits cost of $3,818.

Overhead Application and Unit Fee Derivation

Combining processing labor ($374,032) and QA labor ($3,818) produces a total direct labor and benefits base of $377,850.

To capture indirect institutional operational expenses—including executive management, facilities, security, IT infrastructure, procurement, and HR—the IRS applies an audited agency-wide overhead rate. For the 2025 Cost Model, the IRS utilized the FY 2025 overhead rate of 62.92 percent (derived from audited FY 2024 financials).

Applying 62.92 percent overhead ($237,743) to total labor ($377,850) yields a total annual program cost of $615,593. Dividing the $615,593 full cost by the average annual volume of 8,053 processed requests produces an exact unit cost of $76.44 per request, which the IRS rounded down to $76.

Legal and Policy Analysis in Response to Public Comments

The IRS received one formal written public comment during the notice-and-comment period following the publication of REG-103193-26. No public hearing was requested or held. The Treasury Department’s responses to the three substantive issues raised in the comment set forth important administrative tax law positions.

Public Disclosure of Underlying Cost Models

The commenter requested that the IRS publicly release the underlying 2025 Cost Model and associated working papers to allow public verification of labor estimates and overhead assumptions prior to finalization.

Treasury explicitly rejected the demand to release internal working papers or delay rulemaking, stating: “Regarding the suggestion of publication of and public comment on the cost model and data, the cost model and data will not be part of the final regulations when issued. The data that was required to be included for public review and comment was included in the preamble to the proposed regulations.”

Treasury reasoned that because the preamble detailed the operational hours, wage rates, FTE conversions, indirect multipliers, and GAAP/SFFAS No. 4 methodology, the agency fully satisfied the procedural notice requirements of the Administrative Procedure Act (APA) and OMB Circular A-25.

Excludability of Administrative Rulemaking Expenses

The commenter questioned whether the 2025 Cost Model incorporated the cost of the notice-and-comment rulemaking process itself, and inquired whether less frequent rulemaking would optimize administrative cost recovery.

In response, Treasury emphasized that under OMB Circular A-25 Section 7(a), “user charges will be instituted through the promulgation of regulations.” However, Treasury clarified an important legal distinction regarding allocable costs: OMB Circular A-25 “does not require the IRS to account for and describe activities unrelated to providing estate tax closing letters and administering the estate tax closing letter program that are not included in the costs recovered in the estate tax closing letter user fee.”

Treasury stated definitively that “The costs associated with issuing the regulations required by the IOAA and OMB Circular A-25 to implement changes to the user fee are not such expenses and thus are not to be taken into account in calculating the cost.” Because legal drafting performed by the Office of Chief Counsel and Treasury Tax Policy is distinct from direct service fulfillment executed by SB/SE Examination, rulemaking overhead is legally excluded from the user fee calculation.

Regulatory Flexibility Act and Economic Impact on Small Entities

The commenter requested clarification under the Regulatory Flexibility Act (RFA), 5 U.S.C. § 601 et seq., asking whether small law firms, accounting practices, or professional fiduciaries bear the financial burden of the user fee directly or pass the expense through to client estates.

Treasury reaffirmed its legal position that decedents’ estates are not “small entities” within the meaning of 5 U.S.C. § 601(6). Treasury observed: “The Treasury Department and the IRS do not expect any of the costs to obtain an estate tax closing letter to be borne by small professional fiduciaries or other small entities. Moreover, the $76 user fee is not substantial enough to have a significant economic impact on any entities that could be affected by establishing such a fee.” Consequently, the Secretary certified under 5 U.S.C. § 605(b) that the rule will not have a significant economic impact on a substantial number of small entities.

Effective Date and Practical Applicability

Final Regulations TD 10055 were formally approved on September 2, 2026, by Kevin M. Salinger, Acting Assistant Secretary of the Treasury (Tax Policy), and signed by Frank J. Bisignano, Chief Executive Officer. The rule was filed with the Federal Register on September 24, 2026, with an official publication date of September 25, 2026 (FR Doc. 2026-19666).

Under the terms of 26 CFR § 300.12(d), the $76 user fee becomes effective and applies to all requests for estate tax closing letters received by the IRS after the date that is 30 days following Federal Register publication. Practitioners submitting requests on Form 673 should ensure payments submitted via pay.gov reflect the $76 fee for any request received by the IRS on or after October 26, 2026.

Prepared with assistance from Gemini Notebook.