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please refer to sections 6166(a), (b)(7),

rate of interest on underpayments. This

authorize the representative to enter

(b)(8), and (b)(10).

rate is based on the federal short-term

into closing agreements for the estate.

rate and is announced quarterly by the

Note. If you wish to represent the

Time for payment. Under the

IRS in the Internal Revenue Bulletin.

estate, you must complete and sign the

installment method, the executor may

authorization.

elect to defer payment of the qualified

If you elect installment payments

estate tax, but not interest, for up to 5

and the estate tax due is more than the

If you wish to authorize persons

years from the original payment due

maximum amount to which the 2%

other than attorneys, accountants, and

date. After the first installment of tax is

interest rate applies, each installment

enrolled agents, or if you wish to

paid, you must pay the remaining

payment is deemed to comprise both

authorize more than one person to

installments annually by the date 1 year

tax subject to the 2% interest rate and

receive confidential information or

after the due date of the preceding

tax subject to 45% of the regular

represent the estate, you must

installment. There can be no more than

underpayment rate. The amount of

complete and attach Form 2848. You

10 installment payments.

each installment that is subject to the

must also complete and attach Form

2% rate is the same as the percentage

2848 if you wish to authorize someone

Interest on the unpaid portion of the

of total tax payable in installments that

to enter into closing agreements for the

tax is not deferred and must be paid

is subject to the 2% rate.

estate. Filing a completed Form 2848

annually. Interest must be paid at the

with this return may expedite

same time as and as a part of each

The interest paid on installment

processing of the Form 706.

installment payment of the tax.

payments is not deductible as

If you wish only to authorize

Acceleration of payments. If the

an administrative expense of the

CAUTION

someone to inspect and/or receive

estate fails to make payments of tax or

estate.

confidential tax information (but not to

interest within 6 months of the due

Making the election. If you check

represent you before the IRS),

date, the IRS may terminate the right to

this line to make a final election, you

complete and file Form 8821.

make installment payments and force

must attach the notice of election

an acceleration of payment of the tax

Line 4

described in Regulations section

upon notice and demand.

20.6166-1(b). If you check this line to

Complete line 4 whether or not there is

Generally, if any portion of the

make a protective election, you must

a surviving spouse and whether or not

interest in the closely held business

attach a notice of protective election as

the surviving spouse received any

which qualifies for installment payments

described in Regulations section

benefits from the estate. If there was no

is distributed, sold, exchanged, or

20.6166-1(d). Regulation section

surviving spouse on the date of

otherwise disposed of, or money and

20.6166-1(b) requires that the notice of

decedent’s death, enter “None” in line

other property attributable to such an

election is made by attaching to a

4a and leave lines 4b and 4c blank.

interest is withdrawn, and the

timely filed estate tax return the

The value entered in line 4c need not

aggregate of those events equals or

following information:

be exact. See the instructions for

•

exceeds 50% of the value of the

The decedent’s name and taxpayer

“Amount” under line 5 below.

interest, then the right to make

identification number as they appear on

Line 5

installment payments will be

the estate tax return;

•

terminated, and the unpaid portion of

The amount of tax that is to be paid

Name. Enter the name of each

the tax will be due upon notice and

in installments;

individual, trust, or estate that received

•

demand. See section 6166(g).

The date selected for payment of the

(or will receive) benefits of $5,000 or

first installment;

Interest computation. A special

more from the estate directly as an heir,

•

The number of annual installments,

interest rate applies to installment

next-of-kin, devisee, or legatee; or

including first installment, in which the

payments. For decedents dying in

indirectly (for example, as beneficiary of

tax is to be paid;

2010, the interest rate is 2% on the

an annuity or insurance policy,

•

The properties shown on the estate

lesser of:

shareholder of a corporation, or partner

•

tax return that are the closely held

$469,000 or

of a partnership that is an heir, etc.).

•

business interest (identified by

The amount of the estate tax that is

Identifying number. Enter the SSN of

schedule and item number); and

attributable to the closely held business

•

each individual beneficiary listed. If the

The facts that formed the basis for

and that is payable in installments.

number is unknown, or the individual

the executor’s conclusion that the

2% portion. The 2% portion is an

has no number, please indicate

estate qualifies for payment of the

amount equal to the amount of the

“unknown” or “none.” For trusts and

estate tax in installments.

tentative estate tax (on $1,000,000 plus

other estates, enter the EIN.

You may also elect to pay certain

the applicable exclusion amount in

Relationship. For each individual

GST taxes in installments. See section

effect) minus the applicable credit

beneficiary, enter the relationship (if

6166(i).

amount in effect. However, if the

known) to the decedent by reason of

amount of estate tax extended under

blood, marriage, or adoption. For trust

Line 4. Reversionary or

section 6166 is less than the amount

or estate beneficiaries, indicate

Remainder Interests

computed above, the 2% portion is the

“TRUST” or “ESTATE.”

lesser amount.

For details of this election, see section

Amount. Enter the amount actually

Inflation adjustment. The

6163 and the related regulations.

distributed (or to be distributed) to each

$1,000,000 amount used to calculate

beneficiary including transfers during

the 2% portion is indexed for inflation

the decedent’s life from Schedule G

Part 4—General

for the estates of decedents dying in a

required to be included in the gross

calendar year after 1998. For an estate

estate. The value to be entered need

Information

of a decedent dying in calendar year

not be exact. A reasonable estimate is

2010, the dollar amount used to

sufficient. For example, where precise

Authorization

determine the “2% portion” of the estate

values cannot readily be determined, as

tax payable in installments under

Completing the authorization on page 2

with certain future interests, a

section 6166 is $1,340,000.

of Form 706 will authorize one attorney,

reasonable approximation should be

Computation. Interest on the

accountant, or enrolled agent to

entered. The total of these distributions

portion of the tax in excess of the 2%

represent the estate and receive

should approximate the amount of

portion is figured at 45% of the annual

confidential tax information, but will not

gross estate reduced by funeral and

-12-

Part Instructions

Instructions For Form 706 - United States Estate (And Generation-Skipping Transfer) Tax Return - 2011 Page 12

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