Publication 721 - Tax Guide To U.s. Civil Service Retirement Benefits - 2002 Page 23
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28purpose, if the decedent died after the annuity starting
Voluntary Contributions
date, the taxable portion of a survivor annuity you receive
(other than a temporary annuity for a child) is considered
If you receive an additional survivor annuity benefit from
income in respect of a decedent.
voluntary contributions to the CSRS, treat it separately
The federal estate tax you can deduct is determined by
from the annuity that comes from regular contributions.
comparing the actual federal estate tax and the tax that
Each year you will receive a Form CSF 1099R that will
would have been paid if the income in respect of the
show how much of your total annuity received in the past
decedent were not included in the gross estate.
year was from each type of benefit.
Income tax deductions for the estate tax on the value of
Figure the taxable and tax-free parts of your additional
your survivor annuity will be spread over the period of your
survivor annuity benefit from voluntary contributions using
life expectancy. The deductions cannot be taken beyond
the same rules that apply to regular CSRS and FERS
your life expectancy. Moreover, if you should die before the
survivor annuities, as explained earlier under CSRS or
end of this period, there is no compensating adjustment for
FERS Survivor Annuity.
the unused deductions.
Lump-sum payment. Figure the taxable amount, if any,
If the income in respect of the decedent is ordinary
of a lump-sum payment of the retiree’s unrecovered volun-
income, the estate tax must be deducted as a miscellane-
tary contributions plus any interest using the rules that
ou s item ized deducti on (not subj ect to the
apply to regular lump-sum CSRS or FERS payments, as
2%-of-adjusted-gross-income limit).
explained earlier under Lump-Sum CSRS or FERS Pay-
For more information, see Income in Respect of the
ment.
Decedent in Publication 559.
Thrift Savings Plan
How To Get Tax Help
If you receive a payment from the TSP account of a
deceased federal retiree, the payment is fully taxable.
You can get help with unresolved tax issues, order free
However, if you are the retiree’s surviving spouse, you
publications and forms, ask tax questions, and get more
generally can roll over the otherwise taxable payment tax
information from the IRS in several ways. By selecting the
free. If you do not choose a direct rollover of the TSP
method that is best for you, you will have quick and easy
account, mandatory 20% federal income tax withholding
access to tax help.
will apply. For more information, see Rollover Rules in Part
Contacting your Taxpayer Advocate. If you have at-
II, earlier. If you are not the surviving spouse, the payment
is not eligible for rollover treatment. The TSP will withhold
tempted to deal with an IRS problem unsuccessfully, you
should contact your Taxpayer Advocate.
10% of the payment for federal income tax, unless you give
The Taxpayer Advocate represents your interests and
the TSP a Form W – 4P to choose not to have tax withheld.
If the retiree chose to receive his or her account balance
concerns within the IRS by protecting your rights and
resolving problems that have not been fixed through nor-
as an annuity, the payments you receive as the retiree’s
survivor are fully taxable when you receive them, whether
mal channels. While Taxpayer Advocates cannot change
the tax law or make a technical tax decision, they can clear
they are received as annuity payments or as a cash refund
up problems that resulted from previous contacts and
of the remaining value of the amount used to purchase the
annuity.
ensure that your case is given a complete and impartial
review.
To contact your Taxpayer Advocate:
Federal Estate Tax
•
Call the Taxpayer Advocate at 1– 877 –777 –4778.
A federal estate tax return may have to be filed for the
•
Call, write, or fax the Taxpayer Advocate office in
estate of the retired employee. See Federal Estate Tax in
your area.
Part IV.
•
Call 1–800 –829 –4059 if you are a TTY/TDD user.
Income Tax Deduction
For more information, see Publication 1546, The Tax-
for Estate Tax Paid
payer Advocate Service of the IRS.
Any income that a decedent had a right to receive and
Free tax services. To find out what services are avail-
could have received had death not occurred and that was
able, get Publication 910, Guide to Free Tax Services. It
not properly includible in the decedent’s final income tax
contains a list of free tax publications and an index of tax
return is treated as income in respect of a decedent.
topics. It also describes other free tax information services,
This includes retirement benefits accrued and payable to a
including tax education and assistance programs and a list
retiree before death, but paid to you as a survivor.
of TeleTax topics.
If you are required to include income in respect of a
decedent in gross income for any tax year, you can deduct
Personal computer. With your personal com-
for the same tax year the portion of the federal estate tax
puter and modem, you can access the IRS on the
imposed on the decedent’s estate that is from the inclusion
Internet at While visiting our web
in the estate of the right to receive that amount. For this
site, you can:
Page 23
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