Instructions For Form 706-Qdt (Rev. August 2014) (Page 2 of 7) in pdf

Generally, the return to report

the Trustee/Designated Filer, and

valuation understatements. See

distributions is due on or after January 1

attaching the required statements. See

sections 6662(g) and (h) for more

but not later than April 15 of the year

the instructions under Line 3.

details.

following any calendar year in which a

Installment payments, later for

Return preparer. The Small Business

taxable event occurred or a distribution

additional information.

and Work Opportunity Tax Act of 2007

was made on account of hardship.

(Act) extends the application of return

Make the check payable to “United

preparer penalties to preparers of estate

States Treasury.” Write the surviving

However, if you are filing the return

tax returns. Under section 6694, as

spouse's social security number (SSN)

because of the death of the surviving

amended by the Act, estate tax return

(or individual taxpayer identification

spouse, you must file it within 9 months

preparers, who prepare any return or

number (ITIN), if applicable) and “Form

following the date of death. You must

claim for refund which reflects an

706-QDT” on the check to assist us in

also report on that return all reportable

understatement of tax liability due to

posting it to the proper account.

distributions made during the calendar

willful or reckless conduct, are subject

year in which the surviving spouse died.

Signature(s)

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

This rule may result in a return being

income derived (or income to be

due before April 15. For example, if the

If the trustee is filing the return and there

derived), whichever is greater, for the

surviving spouse died on June 14,

is more than one trustee listed, all listed

preparation of each such return. See

2014, Form 706-QDT would be due

trustees must verify the return. All

section 6694 and the regulations for tax

March 14, 2015, and must include all

trustees are responsible for the return

return preparer understatement

reportable distributions made during

as filed and are liable for penalties

penalties.

2014.

provided for erroneous or false returns.

If the trust ceases to qualify as a

Security for Payment of

The trustee/designated filer who files

QDOT, you must file Form 706-QDT

the return must, in every case, sign the

the Tax

within 9 months of the date on which the

declaration on page 1 under penalties of

trust ceased to qualify. You must

Assets in Excess of $2 Million

perjury. The trustee/designated filer

include on that return any reportable

may use Form 2848, Power of Attorney

If the estate tax value of the assets

distributions made during the calendar

and Declaration of Representative, to

passing to the QDOT exceeds $2

year of the failure to qualify.

authorize another person to act for him

million (determined without regard to

or her before the IRS.

Use Form 4768, Application for

any indebtedness), the trust instrument

Extension of Time To File a Return

must require that the trust meet at least

Paid Preparer Use Only

and/or Pay U.S. Estate (and

one of the following conditions at all

Generally, anyone who is paid to

Generation-Skipping Transfer) Taxes, to

times during the term of the QDOT.

prepare the return must sign the return

apply for an automatic 6-month

At least one U.S. trustee must be a

in the space provided and fill in the Paid

extension of time to file Form 706-QDT.

bank as defined in section 581.

Preparer Use Only area.

Check the “Form 706-QDT” box in Part

The U.S. trustee must furnish a bond

II of Form 4768.

in favor of the IRS in an amount equal to

A paid preparer cannot use a social

65% of the fair market value (FMV) of

security number in the Paid Preparer

Note. An extension of time to file does

the trust assets.

Use Only box. The paid preparer must

not extend the time to pay the tax.

The U.S. trustee must furnish an

use a preparer tax identification number

irrevocable letter of credit issued by a

(PTIN). In addition to signing and

Where To File

bank in an amount equal to 65% of the

completing the required information, the

File Form 706-QDT at the following

FMV of the trust assets.

paid preparer must give a copy of the

address.

completed return to the trustee/

The trust instrument may also meet

designated filer.

Department of the Treasury

this requirement by specific reference to

Internal Revenue Service Center

the applicable paragraph of Regulations

Supplemental Documents

Cincinnati, OH 45999

section 20.2056A-2(d).

You must attach a copy of the trust

instrument to the first Form 706-QDT

The QDOT may alternate between

Paying the Tax

filed for the trust. You do not need to

any of these arrangements provided

Generally, the QDOT estate tax is due

attach a copy of the trust to any

that one of the arrangements is

by April 15 of the year following the

subsequent filings of Form 706-QDT.

operative at any given time. The QDOT

calendar year in which taxable

may give the trustee the discretion to

If you are filing the return due to the

distributions were made. However, if the

use any one of the security

death of the surviving spouse, attach a

surviving spouse died during the year or

arrangements, or may limit the trustee to

copy of the death certificate.

if the trust ceased to qualify as a QDOT

using only one or two of the

during the year, the tax on those events

arrangements.

Penalties

and on any taxable distributions

Assets of $2 Million or Less

occurring during that calendar year is

Section 6651 provides penalties for both

due within 9 months following the date

late filing and for late payment unless

If the estate tax value of the assets

of death or the failure to qualify.

there is reasonable cause for the delay.

passing to the QDOT is $2 million or

The law also provides penalties for

less (determined without regard to any

If the QDOT qualifies, you may elect

willful attempts to evade payment of tax.

indebtedness), the trust instrument must

under section 6166 to pay the tax in

require that the trust meet at least one of

installments. You may make either a

Section 6662 provides penalties for

the following conditions at all times

protective or final election by checking

underpayment of estate taxes which

during the term of the QDOT.

“Yes” on line 3 of Part II—Elections by

exceed $5,000 that are attributable to

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Instructions For Form 706-Qdt (Rev. August 2014) Page 2

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