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•

part of the tax attributable to a

Enter “Supplemental Information”

attempts to evade payment of tax. The

reversionary or remainder interest.

across the top of page 1 of the form;

late filing penalty will not be imposed if

These elections are made by checking

and

the taxpayer can show that the failure

•

lines 3 and 4 (respectively) of Part

Attach a copy of pages 1, 2, and 3 of

to file a timely return is due to

3 — Elections by the Executor, and

the original Form 706 that has already

reasonable cause.

attaching the required statements.

been filed.

Reasonable cause determinations.

If the tax paid with the return is

If you have already been notified

If you receive a notice about penalties

different from the balance due as

that the return has been selected for

after you file Form 706, send an

figured on the return, explain the

examination, you should provide the

explanation and we will determine if you

difference in an attached statement. If

additional information directly to the

meet reasonable cause criteria. Do not

you have made prior payments to the

office conducting the examination.

attach an explanation when you file

IRS, attach a statement to Form 706

Form 706. Explanations attached to the

Supplemental Documents

including these facts.

return at the time of filing will not be

considered.

Paying by check. Make the check

Note. You must attach the death

payable to the “United States

Valuation understatement. Section

certificate to the return.

Treasury.” Please write the decedent’s

6662 provides a 20% penalty for the

If the decedent was a citizen or

name, social security number (SSN),

underpayment of estate tax that

resident of the United States and died

and “Form 706” on the check to assist

exceeds $5,000 when the

testate, attach a certified copy of the

us in posting it to the proper account.

underpayment is attributable to

will to the return. If you cannot obtain a

valuation understatements. A valuation

Signature and Verification

certified copy, attach a copy of the will

understatement occurs when the value

and an explanation of why it is not

of property reported on Form 706 is

certified. Other supplemental

65% or less of the actual value of the

If there is more than one

documents may be required as

property.

executor, all listed executors are

explained below. Examples include

responsible for the return.

CAUTION

This penalty increases to 40% if

Forms 712, Life Insurance Statement;

However, it is sufficient for only one of

there is a gross valuation

709, United States Gift (and

the co-executors to sign the return.

understatement. A gross valuation

Generation-Skipping Transfer) Tax

All executors are responsible for the

understatement occurs if any property

Return; and 706-CE, Certificate of

return as filed and are liable for

on the return is valued at 40% or less of

Payment of Foreign Death Tax; trust

penalties provided for erroneous or

the value determined to be correct.

and power of appointment instruments;

false returns.

and state certification of payment of

Penalties also apply to late filing, late

death taxes. If you do not file these

If two or more persons are liable for

payment, and underpayment of GST

documents with the return, the

filing the return, they should all join

taxes.

processing of the return will be delayed.

together in filing one complete return.

Return preparer. Estate tax return

However, if they are unable to join in

If the decedent was a U.S. citizen

preparers, who prepare any return or

making one complete return, each is

but not a resident of the United States,

claim for refund which reflects an

required to file a return disclosing all

you must attach the following

understatement of tax liability due to

the information the person has about

documents to the return:

willful or reckless conduct, are subject

the estate, including the name of every

1. A copy of the inventory of

to a penalty of $5,000 or 50% of the

person holding an interest in the

property and the schedule of liabilities,

income derived (or income to be

property and a full description of the

claims against the estate, and

derived), whichever is greater, for the

property. If the appointed, qualified, and

expenses of administration filed with

preparation of each such return. See

acting executor is unable to make a

the foreign court of probate jurisdiction,

section 6694, the regulations

complete return, then every person

certified by a proper official of the court;

thereunder, and Ann. 2009-15, 2009-11

holding an interest in the property must,

2. A copy of the return filed under

I.R.B. 687

(

on notice from the IRS, make a return

the foreign inheritance, estate, legacy,

irb09-11.pdf) for more information.

regarding that interest.

succession tax, or other death tax act,

The executor who files the return

Obtaining Forms and

certified by a proper official of the

must, in every case, sign the

foreign tax department, if the estate is

Publications To File or Use

declaration on page 1 under penalties

subject to such a foreign tax; and

of perjury.

3. If the decedent died testate, a

Internet. You can access the IRS

certified copy of the will.

Generally, anyone who is paid to

website 24 hours a day, 7 days a week

prepare the return must sign the return

IRS.gov

to:

in the space provided and fill in the

Rounding Off to Whole

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Download forms, instructions, and

“Paid Preparer Use Only” area. See

Dollars

publications;

section 7701(a)(36)(B) for exceptions.

•

Order IRS products online;

In addition to signing and completing

You may show the money items on the

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Research your tax questions online;

the required information, the paid

return and accompanying schedules as

•

Search publications online by topic or

preparer must give a copy of the

whole-dollar amounts. To do so, drop

keyword; and

completed return to the executor.

any amount less than 50 cents and

•

increase any amount from 50 cents

Note. A paid preparer may sign

tax news by email.

through 99 cents to the next higher

original or amended returns by rubber

Other forms that may be required.

dollar.

stamp, mechanical device, or computer

•

Form SS-5, Application for Social

software program.

Security Card.

Penalties

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Form 706-CE, Certificate of Payment

Amending Form 706

Late filing and late payment. Section

of Foreign Death Tax.

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If you find that you must change

6651 provides for penalties for both late

Form 706-NA, United States Estate

something on a return that has already

filing and for late payment unless there

(and Generation-Skipping Transfer) Tax

been filed, you should:

is reasonable cause for the delay. The

Return, Estate of nonresident not a

•

File another Form 706;

law also provides for penalties for willful

citizen of the United States.

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General Instructions

Instructions For Form 706 - United States Estate (And Generation-Skipping Transfer) Tax Return - 2011 Page 3

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