Instructions For Form 706 - 2016 Page 4
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54single check (including a cashier's
Generally, anyone who is paid to
2. A copy of the return filed under
check) for amounts of $100,000,000
prepare the return must sign the return
the foreign inheritance, estate, legacy,
($100 million) or more. If you're sending
in the space provided and fill in the Paid
succession tax, or other death tax act,
$100 million or more by check, you'll
Preparer Use Only area. See section
certified by a proper official of the
need to spread the payments over two
7701(a)(36)(B) for exceptions.
foreign tax department, if the estate is
or more checks, with each check made
subject to such a foreign tax; and
In addition to signing and completing
out for an amount less than $100
3. If the decedent died testate, a
the required information, the paid
million. The $100 million or more
certified copy of the will.
preparer must give a copy of the
amount limit does not apply to other
completed return to the executor.
methods of payment (such as electronic
Rounding Off to Whole
payments), so please consider paying
Dollars
Note. A paid preparer may sign original
by means other than check.
or amended returns by rubber stamp,
You may show the money items on the
mechanical device, or computer
Paying Electronically. Payment of the
return and accompanying schedules as
software program.
tax due shown on Form 706 may be
whole-dollar amounts. To do so, drop
submitted electronically through the
the cents from any amount with less
Amending Form 706
Electronic Federal Tax Payment System
than 50 cents and increase any amount
(EFTPS). EFTPS is a free service of the
If you find that you must change
with 50 to 99 cents to the next dollar.
Department of Treasury.
something on a return that has already
For example, $1.39 becomes $1 and
been filed, you should:
To be considered timely, payments
$2.55 becomes $3. If you have to add
File another Form 706;
made through EFTPS must be
two or more amounts to compute an
Enter “Supplemental Information”
completed no later than 8 p.m. Eastern
item's value, include the cents when
across the top of page 1 of the form;
time the day before the due date. All
adding the amounts and round off only
and
EFTPS payments must be scheduled in
the total.
Attach a copy of pages 1, 2, 3, and 4
advance of the due date and, if
Penalties
of the original Form 706 that has already
necessary, may be changed or
been filed.
cancelled up to two business days
Late filing and late payment. Section
before the scheduled payment date.
If you have already been notified that
6651 provides for penalties for both late
To get more information about
the return has been selected for
filing and for late payment unless there
EFTPS or to enroll, visit
examination, you should provide the
is reasonable cause for the delay. The
or call 1-800-555-4477. Additional
additional information directly to the
law also provides for penalties for willful
information about EFTPS is available in
office conducting the examination.
attempts to evade payment of tax. The
Publication 966, Electronic Federal Tax
late filing penalty will not be imposed if
Supplemental Documents
Payment System: A Guide to Getting
the taxpayer can show that the failure to
Started.
file a timely return is due to reasonable
Note. You must attach the death
cause.
Signature and Verification
certificate to the return.
Reasonable cause determinations. If
If the decedent was a citizen or
If there is more than one
you receive a notice about penalties
resident of the United States and died
executor, all listed executors are
!
after you file Form 706, send an
testate (leaving a valid will), attach a
responsible for the return.
explanation and we will determine if you
certified copy of the will to the return. If
CAUTION
However, it is sufficient for only one of
meet reasonable cause criteria. Do not
you cannot obtain a certified copy,
the co-executors to sign the return.
attach an explanation when you file
attach a copy of the will and an
Form 706. Explanations attached to the
explanation of why it is not certified.
All executors are responsible for the
return at the time of filing will not be
Other supplemental documents may be
return as filed and are liable for
considered.
required as explained later. Examples
penalties imposed for erroneous or false
include Forms 712, Life Insurance
returns.
Valuation understatement. Section
Statement; 709, United States Gift (and
6662 provides a 20% penalty for the
If two or more persons are liable for
Generation-Skipping Transfer) Tax
underpayment of estate tax that
filing the return, they should all join
Return; and 706-CE, Certificate of
exceeds $5,000 when the
together in filing one complete return.
Payment of Foreign Death Tax; trust
underpayment is attributable to
However, if they are unable to join in
and power of appointment instruments;
valuation understatements. A valuation
making one complete return, each is
and state certification of payment of
understatement occurs when the value
required to file a return disclosing all the
death taxes. If you do not file these
of property reported on Form 706 is
information the person has about the
documents with the return, the
65% or less of the actual value of the
estate, including the name of every
processing of the return will be delayed.
property.
person holding an interest in the
property and a full description of the
If the decedent was a U.S. citizen but
This penalty increases to 40% if
property. If the appointed, qualified, and
not a resident of the United States, you
there is a gross valuation
acting executor is unable to make a
must attach the following documents to
understatement. A gross valuation
complete return, then every person
the return:
understatement occurs if any property
holding an interest in the property must,
on the return is valued at 40% or less of
1. A copy of the inventory of
on notice from the IRS, make a return
the value determined to be correct.
property and the schedule of liabilities,
regarding that interest.
Penalties also apply to late filing, late
claims against the estate, and expenses
payment, and underpayment of GST
The executor who files the return
of administration filed with the foreign
taxes.
must, in every case, sign the declaration
court of probate jurisdiction, certified by
on page 1 under penalties of perjury.
a proper official of the court;
-4-
General Instructions
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