Form 706 (Draft) - United States Estate (And Generation-Skipping Transfer) Tax Return - 2016 Page 51
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55satisfying the claim. These ancillary
the date of the last payment. The estate
paid. Also show the amount being
expenses may include attorneys’ fees,
may also notify the IRS (not more than
claimed for refund.
court costs, appraisal fees, and
annually) as payments are being made
Note. If you made partial claims for a
accounting fees. The estate is not
and possibly qualify for a partial refund
recurring expense, the amount
required to separately identify or
based on the amounts paid through the
presently claimed as a deduction under
substantiate these expenses; however,
date of the notice.
section 2053 will only include the
each expense must meet the
Specific Instructions
amount presently claimed, not the
requirements of section 2053 to be
cumulative amount.
DRAFT AS OF
deductible.
Part 1. General Information
Notice of Final Resolution of
Complete Part 1 by providing
Part 3. Other Schedules PC and
information that is correct and complete
Claim
Forms 843 Filed by the Estate
as of the time Schedule PC is filed. If
When an expense that was the subject
filing an updated Schedule PC with a
On the chart in Part 3, provide
of a section 2053 protective claim for
supplemental Form 706 or as notice of
information on other protective claims
June 16, 2016
refund is finally determined, the estate
final resolution of the protective claim for
for refund that have been previously
must notify the IRS that the claim for
refund, be sure to update the
filed on behalf of the estate (if any),
refund is ready for consideration. The
information from the original filing to
whether on other Schedules PC or on
notification should provide facts and
ensure that it is accurate. Be particularly
Form 843. When the initial claim for
evidence substantiating the deduction
careful to verify that contact information
refund is filed, only information from
under section 2053 and the resulting
(addresses and telephone numbers)
Form(s) 843 need be included in Part 3.
recomputation of the estate tax liability.
and the reason for filing Schedule PC
However, when filing a partial or final
A separate notice of final resolution
are indicated correctly. If the fiduciary is
claim for refund, complete Part 3 by
must be filed with the IRS for each
different from the executor identified on
including the status of all claims filed by
resolved section 2053 protective claim
page 1 of Form 706 or has changed
or on behalf of the estate, including
for refund.
since the initial notice of protective claim
those filed on other Schedules PC with
for refund was filed, attach letters
There are two means by which the
Form 706. For each such claim, give the
testamentary, letters of administration,
estate may notify the IRS of the
place of filing, date of filing and amount
or similar documentation evidencing the
resolution of the uncertainty that
of the claim.
fiduciary's authority to file the protective
deprived the estate of the deduction
Continuation Schedule
claim for refund on behalf of the estate.
when Form 706 was filed. The estate
Include a copy of Form 56, Notice
may file a supplemental Form 706 with
When you need to list more assets or
Concerning Fiduciary Relationship, if it
an updated Schedule PC and including
deductions than you have room for on
has been filed.
each schedule affected by the
one of the main schedules, use the
allowance of the deduction under
Continuation Schedule at the end of
section 2053. Page 1 of Form 706
Part 2. Claim Information
Form 706. It provides a uniform format
should contain the notation
for listing additional assets from
For a protective claim for refund to be
“Supplemental Information – Notification
Schedules A through I and additional
properly filed and considered, the claim
of Consideration of Section 2053
deductions from Schedules J, K, L, M,
or expense forming the basis of the
Protective Claim(s) for Refund” and
and O.
potential 2053 deduction must be
include the filing date of the initial notice
clearly identified. Using the check boxes
of protective claim for refund. A copy of
Please remember to:
provided, indicate whether you are filing
the initial notice of claim should also be
Use a separate Continuation
the initial claim for refund, a claim for
submitted.
Schedule for each main schedule you
partial refund or a final claim. On the
Alternatively, the estate may notify
are continuing. Do not combine assets
chart in Part 2, give the Form 706
the IRS by filing an updated Form 843,
or deductions from different schedules
schedule and item number of the claim
Claim for Refund and Request for
on one Continuation Schedule.
or expense. List any amounts claimed
Abatement. Form 843 must contain the
Make copies of the blank schedule
under exceptions for ascertainable
notation “Notification of Consideration of
amounts (Regulations section
before completing it if you expect to
Section 2053 Protective Claim(s) for
20.2053-1(d)(4)), claims and
need more than one.
Refund,” including the filing date of the
counterclaims in related matters
Use as many Continuation Schedules
initial notice of protective claim for
(Regulations section 20.2053-4(b)), or
as needed to list all the assets or
refund, on page 1. A copy of the initial
claims under $500,000 (Regulations
deductions.
notice of claim must also be submitted.
section 20.2053-4(c)). Provide all
Enter the letter of the schedule you
relevant information as described
are continuing in the space at the top of
The estate should notify the IRS of
including, most importantly, an
the Continuation Schedule.
resolution within 90 days of the date the
explanation of the reasons and
Use the Unit value column only if
claim or expense is paid or the date on
contingencies delaying the actual
continuing Schedule B, E, or G. For all
which the amount of the claim becomes
payment to be made in satisfaction of
other schedules, use this space to
certain and no longer subject to
the claim or expense. Complete
continue the description.
contingency, whichever is later.
columns E and F only if filing a notice of
Carry the total from the Continuation
Separate notifications must be
partial or final resolution. Show the
Schedules forward to the appropriate
submitted for every section 2053
amount of ancillary or related expenses
line on the main schedule.
protective claim for refund that was filed.
to be included in the claim for refund
If the final section 2053 claim or
and indicate whether this amount is
expense involves multiple or recurring
estimated, agreed upon, or has been
payments, the 90-day period begins on
-50-
Instructions for Schedules
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