Veronica Tubman: Well just look at that. Okay, I see it's the top of the hour. For those of you joining, welcome to today's webinar, Estate and Gift Tax. We're glad you're joining us today. My name is Veronica Tubman, and I have the pleasure of serving the Senior Stakeholder Liaison with the Internal Revenue Service and I will moderating for today's webinar which is slated for 75 minutes. But before we begin, if there is anyone in the audience that is with the media, please send us an email to the address on the slide. Be sure to include your contact information and the news publication you're with. Our media relations, Stakeholder Liaison staff will assist you and answer any questions that you may have. As a reminder, this webinar will be recorded, posted to the IRS video portal in a few weeks. This portal is located at www.irsvideos.gov, but please note, continuing education credit or certificates of completions are not offered to any person if you view any version of our webinar after the live broadcast. Keep that in mind. Again, we hope you won't experience any technology issues, but if you do, this slide shows helpful tips and reminders. We posted a Technical Help document that you can download from the Materials section on the left side of your screen. It provides the minimum system requirements for viewing this webinar, along with some best practices and quick solutions. If you complete it and passed your system check, and are still having problems, well just try one of the following: One, close the window where you are viewing the webinar and simply relaunch it. Two, click on settings on your browser viewing screen and just Select HLS. Also you should have received today's PowerPoint in a reminder email. But if you didn't, no worries, we've got you covered. You can download it by clicking on the Materials drop-down arrow on the left side of your screen and that's shown on this slide. Closed captioning is available for today's presentation. If you're having trouble hearing the audio through your computer speakers, then please click the closed captioning drop-down arrow located on the left side of your screen. This feature will allow and it will be available throughout the webinar. If you have a topic specific question today, well we appreciate it if you would please submit it by clicking the Ask question drop-down arrow to reveal the Text Box. Type your question in the Text Box and simply click Send. But this is very important, very important, please do not enter any sensitive taxpayer-specific information in the box. So, during the presentation, we'll take a few breaks to share some knowledge-based questions with you. At those times, a polling style feature will pop up on your screen with the question and multiple-choice answers. Make sure that you select the response that you believe is correct by clicking on the radio button, right next to your technical difficulty] and then simply click Submit. Some people may not get the polling question. This may be because, you have your pop-up blocker on. So, please just take a few minutes to disable your pop-up blocker now, so you can answer the questions. We've included several technical documents that describe how you can allow pop-up blockers based on the browser that you are using. We have documents for Chrome, Firefox, Microsoft Edge, and Safari and that's for Mac's. So, we got you covered. You can access them by clicking on the Materials drop-down arrow on the left side of your screen. We are going to take some time and let's just test the polling feature. Here is your opportunity to ensure that your pop-up blocker is not on, so you can receive the polling questions throughout the presentation.

Okay audience, how many times have you attended an IRS National Webinar? A, this is your first time. B, 1 to 5. C, 6 to 10. D, 11 through 15 or E, 16 or more. So, take a moment and click the radio button that corresponds to your answer. Now let me read that one more time. How many times have you attended an IRS National Webinar? A, for the first time. B, 1 to 5. C, 6 to 10, D, 11 to 15 or E, 16 or more. And I will give you a few more seconds to make your selection. Okay, we're going to stop the polling now. Let's see how often you've attended a national webinar.

Let's take a look and see. Okay. How many times have you attended a National Webinar? And let's take a look and let's see what the results say. So, A first time for 9%; B 1 to 5 for 11%; C 6 to 10 for 33%; D 11 through 15 for 21% or E 16 or more 25%. But we are looking at the polling result. Let's see here. Let's see. Taking a look at what we have. And just making sure that we are touching everybody to give you those few extra seconds. Okay, A 15. B for 1 to 5, 25. C; 15%; D 11 to 15 for 11%; E for 16 or more, 33%. So, we hope that you did not have any problems with answering those polling questions. And that was the purpose of this. And we just want to make sure that you have the time to check your pop-up blocker to make sure you have it turned off. Let me make sure that you are in the right place. Today's webinar Estate and Gift Tax. The webinar is scheduled for approximately 75 minutes. Let me take a couple of minutes to introduce our presenter for today. Lisa M. Piehl, Internal Revenue Service, Woodland Hill, is the Supervisory Attorney, Program Manager for Estate and Gift Tax Policy, where she has been since 2008. Lisa began her career with the Internal Revenue Service as an Estate and Gift Tax Attorney in 1994. In 2001, she became the Supervisory Attorney, Group Manager and in 2006, an Attorney Advisor for Policy Manager and headquarters for the estate and gift tax division. Lisa received her Bachelor of Arts in Political Science from San Francisco State University and graduated from Southwestern University School of Law in Los Angeles, California, on the West Coast where she obtained her Juris Doctorate. Lisa is a Member of the California Bar, is admitted to the United States District Court, for the Central District of California and the United States Court of Appeals for the Ninth Circuit. Right now I'm going to turn it over to Lisa to begin the presentation. Lisa, you're up. Lisa M. Piehl: Thank you, Veronica and hello everyone. I appreciate the opportunity to speak with you today. Before we get started, I wanted to give a quick reminder that the information presented today is for educational purposes only and shall not be cited or relied upon as authority. I'm hoping you can all hear me. I'm having a little bit of feedback. So our objectives today include, discussing the basic responsibilities and filing requirements after someone dies. Please note, that our discussion today covers federal requirements only. You will need to verify with estate taxing authority to determine what their filing requirements are for a decedent. I will explain the basics of federal Estate and Gift Tax, including the filing requirements for estate tax returns and gift tax returns. I will also highlight some recent development. First I'd like to cover what is required for tax purposes when someone dies. The most common actions are to file final income tax returns, usually the Form 1040, United States income tax return. Including any missing returns and pay any individual income taxes due. This needs to be done for every deceased individual. Later, we will talk about decedents who may have estate tax or gift tax requirements. A fiduciary takes care of these responsibilities for the decedent. The term fiduciary applies to any person acting for another person. It applies to persons who have positions of trust on behalf of others. It generally includes a guardian, trustee, executor, administrator, receiver or conservator. A personal representative for a decedent's estate is also fiduciary. If a person is appointed to act in a fiduciary capacity for another, they must file a written notice with the Internal Revenue Service stating this. Form 56, notice concerning fiduciary relationship is used for this purpose. Your client will need to file Form 56 as soon as all the necessary information, including the Employer Identification Number or EIN is available. One of the first action a fiduciary should take as the personal representative for the decedent is to apply for an EIN for the estate. They should apply for this number as soon as possible because it is needed to enter on returns, statements and other documents filed concerning the estate. Taxpayers can get an EIN by applying online at IRS.gov/EIN. Generally, if they apply online, they will receive an EIN immediately upon completing the application. They can also apply using Form SS-4, Application for Employer Identification Number. Generally, if they apply by mail, it takes about four weeks to get the EIN. The identification number is provided to payers of interest and dividends and other payers who must file a return concerning the estate. Accordingly, the personnel representative handling the estate must furnish the appropriate identification number to the payer. For example, if interest is payable to the estate, the estate's EIN must be provided to the payer, so it can be used to report the interest on Form 1099 INT. Hey, Veronica I think it's time for our first polling question. Veronica Tubman: Well what do you know, Lisa, I do believe that you are correct. Okay, audience. Lisa gave us some really great information, put you're thinking caps on for our first polling question. Why does the personal representative need to obtain an EIN for the estate? A, the decedent's Social Security Number is revoked at death. B, to notify the IRS of a fiduciary relationship. Is it C, it is needed to enter on returns, statements and other documents filed concerning the estate or is it D, all of the above? Remember, click the radio button that best describes the answer that you think is correct. So take a few moments and push that radio button. Let me read it one more time. Why does the personal representative need to obtain an EIN for the estate? A, the decedent's Social Security Number is revoked at death. B, to notify the IRS of a fiduciary relationship. C, it is needed to enter on returns, statements and other documents filed concerning the estate or D, all of the above? I will give you just a few seconds to put your answers in. Okay, we're going to stop the polling now and let's share the correct response on the next screen. And I'll read it again, this is our first one. We're all revved up. Why does the personal representative need to obtain EIN for the estate? A, the decedent's Social Security Number is revoked at death. B, to notify the IRS of a fiduciary relationship. C, it is needed to enter on returns, statements and other documents filed concerning the estate, D, all of the above. So let's see how you all did on this. Let's look at the percentage rates. And oh my goodness, only 23% of you responded correctly. Well Lisa, maybe we need a little clarification if you can give us a little bit more detail on this question, we'd appreciate it. Lisa M. Piehl: Sure. The decedent's Social Security Number remains valid as to the decedent. And the Social Security Administration does not revoke it. The estate is a separate legal entity that needs its own Tax Identification Number. Form 56 is used to notify the IRS of a fiduciary relationship, not an application for an EIN. Veronica Tubman: Okay, good job. Thank you, Lisa for the explanation to help everyone out. That definitely helps us out. And I'm going to turn it over to you to continue. Lisa M. Piehl: Thank you. You will note that I've been using the term, personal representative, to describe the estate's fiduciary. A personal representative of an estate is an executor, administrator or anyone who is in-charge of the decedent's property. Generally, an executor is named in a decedent's will to administer the estate and distribute property as the decedent has directed. An administrator is usually appointed by the court, if no will exists. If no executor was named in the will, or if the named executor can't or won't serve. In general, an executor and an administrator perform the same duties that have the same responsibilities. For estate tax purposes, if there is no executor or administrator appointed, qualified and acting within the United States, the term executor includes anyone in actual or constructive possession of any property of the decedent. This is important, because executors have certain responsibilities to report. So, as I said before, the personal representative must file the final income tax return, Form 1040, of the decedent for the year of death and any returns not filed for proceeding years. A surviving spouse, under certain circumstances, may have to file the returns for the decedent. If an individual died after the close of the tax year, but before the return for that year was filed, the return for the year just closed won't be the final return. The return for that year will be a regular return and the personal representative must file it. Let me give you an example. Sara Maple died on March 21st, 2018. Before filing her 2017 tax return. Her personal representative must file her 2017 return by April 15, 2018. Her final tax return covering the period from January 1st, 2018 to March 20th, 2018 is due April 15th, 2019. The final income tax return, Form 1040, includes all income received through the date of death. An estate is a taxable entity separate from the decedent and comes into being with the death of the individual. It exists until the final distribution of its assets to the heirs and other beneficiaries. The income earned by the assets, okay, let me say that again, the income earned by the assets during this period must be reported by the estate under the conditions described in Publication 559. The tax on the estate's income is generally figured in the same manner and on the same basis as an individual's income tax, with certain differences in the computation of deductions and credits. The estate's income, like an individual's income, must be reported annually on either a calendar or fiscal year basis. Every domestic estate with gross income of $600 or more during a tax year must file a Form 1041, US Income Tax Return for Estates and Trusts. If one or more of the beneficiaries of the domestic estate are non-resident aliens, the personal representative must file Form 1041, even if the gross income of the estate is less than $600. Before filing a 1041, an EIN must be obtained.

Veronica, I think we're ready for the second polling question. Let's see if we could do better.

Veronica Tubman: Yes Lisa, we are. We're ready. Okay, audience. I hope that you're ready too.

Now, for our second polling question. In which of the following situations with the personal - excuse me, the estate's personal representative have to file a Form 1041? Is it A, the decedent was a citizen and resident of Canada, and the estate is administered in Canada. Or B, the estate recognized farming income of $30,000 in the year after the decedent's death? Or is it C, the decedent's nephew is a non-resident who is a Mexican citizen, but did not receive property from the estate? Or lastly, is it D, the estate's only income was $500 in the checking account interest? Take a minute, click the radio button that answers the question. I'm going to give you a few seconds to make your selection. Okay, audience. We're going to stop the polling now, and let's share the correct answer on the next slide. In which of the following situations with the estate's personal representative have to file a Form 1041? Is it A, the decedent was a citizen and resident of Canada, and the estate is administered in Canada? Is it B, the estate recognized farming income of $30,000 in the year after the decedent's death? Or C, the decedent's nephew - who is a Mexican citizen, but did not receive property from the estate? Or is it D, the estate's only income was $500 in the checking account that was interest? Okay, the answer is B; let me take a look at our rates. And I see that it was 44% of you answered that correctly. So, Lisa, can you provide a little bit more detail on this question? Lisa M. Piehl: Sure, I can. It's a difficult area, so I do understand that. A Form 1041 is only required for domestic estate, so the Canadian estate would not file. A domestic estate with a non-resident alien beneficiary would be required to file, but the decedent's Mexican nephew in this example was not a beneficiary of the estate. The gross income threshold for filing is $600, so an estate with $30,000 of farming income would be required to file. But an estate with only $500 of checking account interest would not. Veronica Tubman: Okay, Lisa. Thank you for clarifying this response. It looks like you're going to go over Estate and Gift Tax Basics next. So, Lisa you're up. Lisa M. Piehl: Thanks, Veronica. So in addition to the income tax, certain taxpayers may be liable for federal, estate and/or federal gift tax. That's what I do. The federal estate tax is a tax on the transfer of property at death, while the federal gift tax is a tax on transfers made during life.

Federal gift and estate tax liability is imposed only when the cumulative value of lifetime transfers and transfers at death less any applicable deductions exceeds the taxpayer's exclusion amount. If a person dies with asset in excess of the basic exclusion amount, which is currently $12,920,000 for 2023 deaths, the personal representative must file a Form 706, United States Estate and Generation-Skipping Transfer Tax return. We call that Form 706. Form 706 must be filed with the IRS in Kansas City, Missouri. The Form 709 United States Gift and Generation-Skipping Transfer Tax return is also filed in Kansas City. However, if you need to file any supplemental or amended filings for either form those get sent to Florence, Kentucky. All information on how and where to file is in the instructions to the forms. The current version of Form 706 was released in August 2019 for decedents dying after December 31st, 2018. When filing, please make sure to use the full legal name of the decedent. The executor is responsible for filing the estate tax return, which is due nine months after the date of death. The term executor on line 6a of the Form 706 refers to the executor, personal representative or administrator of the decedent's estate. If an executor or administrator is not appointed, every person in actual or constructive possession of any property of the decedent is considered the statutory executor for the purposes of filing the estate tax return. Again that is the Form 706 of the estate tax return. If there is more than one executor, enter the information of the executor to be contacted by the IRS on Line 6A through 6C, that's 6A through 6C as in Charles, and attach a sheet with the information about other executors. It is sufficient for only one of the co-executors to sign the return, but note, all executors are responsible for the accuracy of the return. An executor may elect portability of any Deceased Spousal Unused Exclusion, I'm going to call that DSUE from this point forward, because the same, Deceased Spousal Unused Exclusion is too much for my speech problems here. So, an executor may elect portability of any DSUE by timely filing a complete and properly prepared estate tax return for a decedent who died in 2011 or later. Generally, returns for smaller estates filed only to elect portability may report asset subject to a marital or charitable deduction by using good faith estimate of value made with due diligence. The executor must check Item 11 on Page 1, Part one of the Form 706, if an estimate is being used. Please review www.irs.gov/businesses/small-businesses-self-employed/filing-esta te-and-gift-tax-returns for additional filing information. That address is on the slide. This page provides the filing addresses for all estate and gift-related returns, including supplemental and other miscellaneous forms. Please allow at least nine months for processing prior to making inquiries about a filed estate tax return. Okay, let's talk about gift tax returns. A gift tax return is an annual return with a new version released each year. Generally, the Form 709 must be filed after January 1st, but not later than April 15th of the year after the gift was made. If you are a citizen or a resident of the United States, you must file a gift tax return, whether or not there is any tax liability ultimately do. If you give gifts to someone in 2023, totaling more than $17,000. Certain gifts called future interests must be reported even if the gift was under the annual exclusion amount. Detailed information is available in the instructions to Form 709.

Spouses may not file a joint gift tax return. Each individual is responsible for their own Form 709. Spouses may however elect to split gifts they made during the year. But to do so a gift tax return must be filed to make the selection. If a gift is of community property, it is considered made one half by each spouse. So for example, a gift of $100,000 of community property is considered a gift of $50,000 made by each spouse. And each spouse must file a gift tax return.

Likewise, each spouse must file a gift tax return if they made a gift of property held by them as joint tenants or tenants by the entirety. Only individuals are required to file gift tax returns if a trust, estate, partnership or corporation makes a gift, the individual beneficiaries, partners or stockholders are considered donors and may be liable for any gift taxes. The donor is responsible for paying the gift tax. However, if the donor does not pay the tax, the person receiving the gift, known as a donee, may have to pay the tax. If a donor dies before a filing return, the personal representative for the donor's estate must file the return. An extension of time to file is available for both Estate and Gift Tax returns. Form 4768 is used to request an extension of time to file the estate tax return. Form 4768 may also be used to request an extension of time to pay estate tax. An extension of time to file a gift tax return may be requested on Form 8892. Form 4868 is used to request an extension of time to file both an income tax return and a gift tax return. To apply for an extension of time to pay - let me try that again, to apply for an extension of time to pay gift tax due - that's gift taxes due to an undue hardship, Form 1127 must be used. Please look at each Forms instructions for more information. You should be aware that the official record of the Internal Revenue Service is established upon receipt of the first file document, which is often an extension of time to file or a power of attorney, for a tax return due. For security purposes, these items are verified during each inquiry and any other discrepancies may cause an inquiry to be rejected. This is essential to protect from identity theft and may cause difficulty for the personal representative if the information provided is not as originally submitted. This is a common area where taxpayers may seek assistance and can be corrected by making sure the Form 56, representation document such as Form 2848 or Form 8821, extensions and actual tax returns are all consistent. As I mentioned before, federal estate tax liability is imposed only when the cumulative value of lifetime transfers and transfers at death less any applicable deductions, exceeds a taxpayer's exclusion amount. A decedent's lifetime gifts must be reported on the Form 706. A common mistake that filers make on the Form 706 is to omit the prior gift information required to be reported on Lines 8A, B and C on Page 2, Part 4. If you know which years gift tax returns were filed, you can request a copy and/or a transcript of each Form 709 from the IRS using Form 4506 and/or Form 4506-T. 4506 is to get a copy of the return, 4506-T is for the transcript. If however, you do not know which years were filed, or even if any gift tax returns were filed, it is acceptable to send a written request to the IRS to obtain a gift tax transcript. This method should be reserved for taxpayers who do not have records of year or years in which a gift tax return was filed. The written request must include language requesting a determination of all gift tax returns filed for the taxpayer. You'd use the same fax number or mailing address provided in the Form 4506-T instructions. The requestor's authority to make the request must be documented and substantiated.

Please note, some records are kept on microfilm and take time to verify. So, please allow up to eight weeks for a response. The Form 4506 Series includes generic forms used for all tax types.

Gift tax returns have unique aspects that do not fit well into the forms. So, what we've done is, we provided the information for you. So, to make sure you complete the form correctly, consult www.irs.gov/businesses/small-businesses-self-employed/frequently- asked-questions-on-gift-taxes and follow the step-by-step instructions under how do I secure a gift tax return account transcript? Or how do I secure a copy of a gift tax return? Please note, transcripts are free, but there is a fee when requesting a copy of a gift tax return. I believe the current price for that is $50 per return. Gross estate tax, before exclusions and credits is computed using Lines 1 through 8 of Part 2 on the First Page of Form 706. That's why you will need the prior gift information we just discussed in order to complete Line 4 and Line 7. There are worksheets available in the instructions to Form 706 to assist with completing Lines 4 and 7. The Line 4 worksheet computes the adjusted taxable gifts made by the decedent after 1976. You will need all the decedent's gift tax returns to complete worksheet TG. In addition, the executor must make a reasonable effort to discover any gifts in excess of the annual exclusion made by the decedent or on behalf of the decedent that was not reported on a filed Form 709. The Line 7 worksheet assist with the calculation of total gift tax paid or payable. It also includes the calculation for cumulative lifetime gifts on which tax was paid or payable. This amount is used in computing portability of DSUE. Row by row instructions for completing Line 7 worksheet are provided in the Form 706 instructions. Please remember to submit the copy of the Line 7 worksheet when you file the Form 706. So let's talk about portability. The executor of the estate elects portability of any DSUE by completing and timely filing Form 706. There is no box to check. If, however, the executor wants to opt out of making the portability election, the box in Section A of Part 6 on Page 4 of the Form 706 must be checked. When the Form 706 is not otherwise required to be filed, because let's say, the taxpayer died with less than the filing amount, the executor does not need to file in order to opt out of the portability election. You only need to file if you don't meet the filing requirements and you want to elect the portability. A non-resident surviving spouse who is not a citizen of the United States may not use the DSUE of a deceased spouse who was a US citizen, except to the extent allowed by treaty between their country and the United States, or the surviving spouse becomes a citizen of the United States. The use of DSUE by a surviving spouse who is not a US citizen also may be allowed if property passes to a qualified domestic trust for the benefit of the surviving spouse. There is more information regarding qualified domestic trust in the instructions to the Form 706 related to the Schedule M, marital deduction. Please note, that a portability election may not be made if the decedent was not a US citizen or resident at the time of death. The executor will use Section C of Part 6 on Page 4 of the Form 706 to compute the DSUE amount portable to the surviving spouse. Section D is used to compute the amount of DSUE the decedent received from a predeceased spouse or spouses. Note, that any amount of DSUE received from a predeceased spouse other than the last deceased spouse that was not used in making lifetime gifts is no longer available. I know this is a lot. So, bear with me. The estate tax and the gift tax regimes are unified. What does that mean? That means, the basic exclusion amount which was $12,060,000 for people who died in 2022, and is now $12,920,000 per death in 2023, is available to make lifetime transfers or transfers through a decedent's estate, or a combination thereof, without any tax liability. In addition to the basic exclusion amount, the annual exclusion allows a donor to transfer present interest gifts value at up to $15,000 in 2018 through 2021, $16,000 in 2022, and now $17,000 in 2023, annually to individual donees. Annual exclusion gifts do not require the filing of a gift tax return. However, a gift tax return must be filed if the gift is a gift of a future interest or if a married couple splits the gift. Spouses can split gifts so a married couple may currently jointly gift up to $34,000 without incurring gift tax consequences. Generally, each spouse must file an individual gift tax return, even if one spouse has not made any gifts and is just splitting the gift made by their spouse. An unlimited marital deduction is available for gifts to a US citizen or resident spouse, including gifts to a same-sex spouse. For gifts to a non-resident, non-US citizen spouse, there is an increased annual exclusion amount. It was $164,000 in 2022 and is now $175,000 in 2023.

The last deceased spouse's DSUE amount may be used to make lifetime transfers. The identity of the last deceased spouse is determined as of the date of the gift. Make sure to attach the predeceased spouse's Form 706 with the gift tax return when you use a DSUE amount against taxable gifts. Remember, it's mandatory to exhaust any available DSUE before using the surviving spouse's own exclusion amount. Well I think I need a break. So, Veronica, can we do a polling question number three, please? Veronica Tubman: Sure, Lisa. We'll give you a break. Let's take a look at our third polling question audience. Okay, the question says in which the following situations would the personal representative need to file a Form 706? So, is the correct answer, A, the decedent made gifts of $10,000,000 million to her children during life, and died owing assets worth $5,000,000 million or B, the decedent made no gifts during life, owned assets worth $8,000,000 million at death, and did not have a surviving spouse. Is it C, the decedent, who was a widow, made annual gifts of $2,500 to each of her children during life, and died owning assets of $12,000,000 million or is it D, the taxpayer is still alive? So, put your thinking caps on and take a moment, click the radio buttons that best answers the question. And I'll give you a few more seconds to make your selection. Okay, we're going to stop the polling now and let's share the correct answer on the next slide. Now, this is our third question, in which of the following situations would a personal representative need to file a Form 706? A, the decedent made gifts of $10,000,000 million to her children during life and died owing assets worth $5,000,000 million or B, the decedent made no gifts during life, owned assets worth $8,000,000 million at death, and did not have a surviving spouse or C, the decedent who was a widow, made annual gifts of $2,500 to each of her children during life, and died owning assets of $12,000,000 million or the D, the taxpayer is still alive. So let's take a look. The answer is A and let's see how well you did with this question. I see that 62% of responded correctly. So, Lisa, I think you may need a little more clarification and provide us with just a list of more details, please. Lisa M. Piehl: Sure. I mean it is a confusing area. So I do understand. An estate tax return is required to be filed where the decedent's lifetime gifts plus assets owned at death total more than the exclusion amount which is currently $12,920,000 million. So, an estate tax return may be filed to elect portability of any remaining exclusion if that threshold has not been met, but only where there is a surviving spouse. Gifts of less than the annual exclusion amount currently $17,000 are not considered taxable gifts and do not go against the exclusion amount. An estate tax return cannot be filed for a taxpayer who is still alive. Does that help? Veronica Tubman: Lisa, that helps out a lot. And I think that is for the audience. So I'm going to turn it back over to you.

Lisa M. Piehl: Okay, I'll do my best. And I'll try and stop being so confusing. The basis consistency provisions are another area that we deal with, the basis consistency provisions require that the basis of certain property acquired from a decedent be consistent with the value of the property as finally determined for federal estate tax purposes. Estates must provide basis information to the IRS, and to the recipients of certain property acquired from a decedent within 30 days of the due date of the Form 706 or the actual filing date of Form 706, whichever is earlier. An estate must file Form 8971, Information Regarding Beneficiaries Acquiring Property from a Decedent, only if the estate is required to file Form 706 or Form 706 NA which is the international estate tax return. Schedule A of Form 8971 must be provided to each beneficiary listed on Form 8971. The Form 8971 filed with the IRS must include copies of each Schedule A an estate furnishes to a beneficiary. You're not supposed to attach the Form 8971 to the estate tax return, it must be filed separately. Now, we will review some general procedural and substantive updates regarding federal estate and gift tax. Effective July 8th, 2022, Revenue Procedure 2022-32 was issued to provide a simplified method for certain taxpayers to obtain an extension of time to make a portability election. The simplified procedure is available only when the decedent was survived by a spouse, died after December 31st, 2010 who was a citizen or resident of the United States on the date of death, and the executor was not required to file an estate tax return under Section 6018(a) of the code. In addition, the executor must not have previously made a timely estate tax return filing. In order to gain relief under the Revenue Procedure, the executor must file a completed and properly prepared Form 706 on or before the fifth annual anniversary of the decedent's date of death and must indicate, Filed pursuant to Rev. Proc. 2022-32 to elect portability under Section 2010 (c)(5)(A), at the top of the return.

If the requirement is satisfied, the executor is deemed to satisfy the requirements of relief under Section 301.9100-3 of the regulations and is granted an extension of time to elect portability. If, however, it's later determined that the executor was required to file an estate tax return under Section 6018(a) of the code, the extension granted by the Revenue Procedure will be retroactively null and void. To help reduce for the tax community, the IRS allows taxpayers to use electronic or digital signatures on paper forms that cannot be filed electronically.

Currently the policy is in effect through October 31st, 2023, but the IRS is studying possible further extensions of this option. Estate, gift and generation-skipping transfer tax forms such as Form 709, the entire Form 706 Series, Form 1127, Form 4768 and Form 8971 are among those included. For more information, please visit www.irs.gov/newsroom/details-on-using-e-signatures-for-certain-fo rms. The IRS will accept a wide range of electronic signatures, including a typed name on a signature block, a scanned or digitalized image of a handwritten signature that is attached to an electronic record, a handwritten signature input onto an electronic signature pad, a handwritten signature or mark input on a display screen with the stylus device, or a signature created by third-party software. The IRS will also accept scanned or photographed images of signatures including common file types such as tiff, jpg, pdf, Microsoft Office programs and zip. To help protect the health of taxpayers, tax professionals and IRS employees during the COVID-19 pandemic, IRS has taken efforts to reduce in-person contact by allowing more communication between parties to be done remotely. This includes the use of E-signatures, use of E-fax, and retrieval of taxpayer records using third-party websites. You may also be able to send encrypted documents via email using the procedures outlined at www.irs.gov/help/sign-and-send-documents-electronically. If you or your client need to use a third-party website for the transfer of records, or if you wish to email encrypted documents, talk to the examiner working the case for more information. In January 2021, the IRS rolled out a new tool for uploading authorization forms. You can securely submit online Form 2848, Power of Attorney and Declaration of Representative, and Form 8821, Tax Information Authorization. To have a successful submission, please go to IRS.gov, search for Form 2848 or Form 8821, and scroll to and click the link for Submit Forms 2848 and 8821 Online. And please read the full instructions and the FAQs. While we are discussing taxpayer authorizations, we should take a moment to touch on the authorization on Page 2, Part 4 of the Form 706. This authorization is recorded on the Centralized Authorization File, otherwise known as CAF just like the 2848 and Form 8821 online. But it's not as expansive as the Form 2848. The Form 2848 is a more flexible document. Completing the Part 4 authorization will authorize one attorney, accountant or enrolled agent to represent the estate and to receive confidential tax information. But it will not authorize the representative to enter into closing agreements for the estate. If a taxpayer would like to authorize a representative to enter into agreements or perform other designated actions on behalf of the estate, they must file Form 2848 with Form 706.

If a taxpayer wishes only to authorize someone to inspect and/or receive confidential tax information, but not to represent them before the IRS, they can use Form 8821 so 8821 should be used. Another important e-services product available to you is a Transcript Delivery Service or TDS. This provides authorized practitioners the ability to view and print instant account transcripts for estate tax returns. Authorized tax professionals may use TDS if they are authenticated through secure access and registered with e-services Transcript Delivery Service.

Tax professionals must have an online access account with the IRS that was created or re-validated after December 10th, 2017 and authenticated through secure access. Professionals authenticated after December 10th, 2017, may proceed to create an account for TDS. Requests will be fulfilled only when a properly executed Form 2848 or Form 8821 is already on file for the same account. So, notice 2017-12 explains that an account transcript issued by the IRS can substitute for Letter 627, Estate Tax Closing Letter. Transaction Code 421 on that transcript indicates an estate tax return, Form 706, has been accepted as filed or that the examination is complete.

Please note that the Transaction code 421 explanation will display, Closed examination of tax return” in all instances. If the transaction code 421 is not present, that means the tax return remains under review. Please allow additional time before checking again. You can visit www.irs.gov/businesses/small-business-self-employed/transcripts-i n-lieu-of-estate-tax-closing-letters for more information. Okay, Veronica, I think we're at our last polling question. Veronica Tubman: Yes, Lisa, we are. Our polling question four, which of these is not an example of the digital tools and services available to you? Is it A, acceptance of electronic or digital signatures? Is it B, online submission of Form 2848 and Form 8821? Or is it C, Transcript Delivery Service? Or D, personalized email account? So, take a moment, click the radio button that best answers the question. And I'll give you a few more seconds to make your selection. Just remember, Which of these is not an example of the digital tools and services available to you? Again, is it A, acceptance of electronic or digital signatures? B, online submission of Form 2848 and Form 8821? Or is it C, Transcript Delivery Service? Or is it D, personalized email account? And I'll give you just a few more seconds to think about that. While we are waiting on the polling results. Okay, let's think about what the question is. We're going to think about our final polling question which is our fourth polling question. Okay, audience, just think which of these is not keyword not a digital tool available to you? Alright, audience, we are going to stop the polling. Hopefully everybody has their answer. Let's look at our final polling question, which of these is not an example of the digital tools and services available to you? Again A, acceptance of electronic or digital signatures? B, online submission of Form 2848 and Form 8821? C, Transcript Delivery Service or D, personalized email account? And the answer is D, let me see how well we did with this question. 84% of you responded correctly. You rock audience. That is a wonderful response rate. And thank you so much for that. And Lisa, we're going to turn it back over to you. Lisa M. Piehl: Well, thank you, Veronica and great job, everyone. I do want to touch base on a few other things. The estate tax closing letter which I discussed before, Letter 627 there is a new process to get one, the new estate tax closing letter user fee regulations were issued effective for requests made on or after October 28th, 2021. The request is made through pay.gov and it costs $67. What this means is that there is a one-step web-based procedure now available to request an Estate Tax Closing Letter. And remember, Estate Tax Closing Letters are only for the Form 706. So, you can go to the FAQs on the estate tax closing letter for a detailed instructions on how to make the request and pay the user fee for an estate tax closing letter via pay.gov. You can get to the FAQs at www.irs.gov/ETCL.

Remember, you need to give us at least nine months after filing the return to make the closing letter request that gives us time to process the returns. For examine returns, you're going to need to allow up to 30 days after the examination is complete for processing. While not required, it's always beneficial to review a transcript to verify that Transaction Code 421 is present. If the Transaction Code 421 is present, you can go ahead and make the request for the Estate Tax Closing Letter at any time. Remember, and I'm going to say this again, because unfortunately this part gets missed a lot. The estate tax closing letter is only available for the Form 706 Series of estate tax returns. There is no closing letter for gift tax returns or trust. After the request is made, the closing letter will be prepared and issued to the executor at the address of record, which we discussed earlier as well as the other authorized persons. The FAQs at IRS.gov/ETCL provide detailed information on who's going to get it. So, estate tax returns can be quite voluminous and we often get questions about how to organize the return for filing. Please don't use 3-ring binders or any of that other fancy stuff, it gets torn apart, it's difficult and it's not necessary. So you don't need to use really nice three-ring binder notebooks or have them bound. You need to make sure the pages stay together, you may need a two-prong fastener or a single ring holding everything together, that's sufficient. It's not necessary however, because the service center usually removes all fasteners during the process.

But it really is probably a best practice to use something to hold the pages together. We do recommend that you create a table of contents with numbered or lettered tabs. That makes it easier to find things. So as I mentioned earlier, the official record of the IRS is established upon receipt of the first filed document which is often an extension of time to file or a power of attorney for a tax return series. The name and address of a tax return is changed or updated only when a tax return is filed or a Form 8822 change of address is submitted. Submitting corrections or updates on other forms such as a Form 2848 or 4506, Request for a Tax Return will not change the official record. If a tax professional signs the request for information, provide a copy of the initial Form 2848 submitted to the IRS for the same taxpayer in the same tax year.

A new power of attorney is not sufficient, the record must be established on CAF prior to sending the request for information. Proper substantiation of the requester's authorization to receive information will significantly reduce the rejection notices issued. Use the most current revision of the form and instructions to complete the form. Although it's not mandatory, it may be beneficial to check, Other Acts Authorized, on Line 5A and write in, Request and Receive IRS Transcripts. Provide a copy of the official Form 2848 with all future correspondence with the IRS, if required. Do not change the date, do not provide an original signature, simply label it as a copy. The official - the original filing will be electronically verified by the IRS. And please note, if you marked over something, it invalidates it as well. So, you can't alter the document when submitting it. To update the CAF with the tax professional's address or telephone number, do not submit a new Form 2848. Instead, send written notification that includes the new information and the representative's signature to the location where the original Form 2848 was filed. The CAF system is only updated by documents received at the CAF unit. So, IRS.gov should be the first source you go to for the latest information regarding Estate and Gift Taxes. We keep the FAQs updated. You can use the search feature to find the information listed on the slide. If you still have questions after reviewing the information on IRS.gov, you may call the Estate and Gift Helpline at 866-699-4083. I think that's it for me, Veronica. Veronica Tubman: Okay. Thank you, Lisa. Hello again, audience, this is me Veronica Tubman and I'll be moderating the Q&;A session. But before we start the Q&;A session, you know I want to thank everyone for attending today's presentation "Estate and Gift Tax". Earlier I mentioned we want to know what questions you have for our presenters so, here's your opportunity. If you haven't input your questions well there's still time. Go right ahead and click on the drop-down arrow next to the “Ask Question”, type in your question and just click “Send”. Lisa is going to hang around and stay on with us to answer your questions. One thing though before we start, we may not have time to answer all the questions submitted, but we'll answer as many as time allows. So let's get started, so we can get to as many questions as possible. So let's take a look. Okay, Lisa, here we go. You are ready for me? Okay. Lisa M. Piehl: I'm ready. Veronica Tubman: Alright. How to file late gift tax returns? How's that done Lisa? Lisa M. Piehl: Just how you would file the total gift tax returns. You fill out the Form 709 and submit the original Form 709 to the Kansas City Service Center. You might want to include a statement if you're doing at a reasonable cause, if it's a taxable gift tax return to avoid penalties. But if it's not taxable, all you have to do is submit the late filed of the gift tax return to Kansas City, and it will be processed. Veronica Tubman: Okay, got it. If a taxpayer filed the gift tax returns claiming the lifetime exclusion of $12,060,000 million, can that same taxpayer gift in additional $860,000 and claim the lifetime exclusion amount with the 2023 limit? Lisa M. Piehl: Okay. I think what you're asking here is, you made a completed gift in 2022 of a total of $12,060,000 million after the annual exclusion. Yeah so that you used up your entire lifetime exclusion in 2022. In 2023, there's going to be an additional $860,000 exclusion available. So gifts made in 2023, you can make additional gifts to then use out that additional amount. So, if that's your question then that's your answer. As that increases, you continue to use the difference in the future years. Veronica Tubman: Got it.

Okay. Let's see. We got some really, really good questions and we thank you for sending us your questions. So let's take a look. I think somebody needs a little clarity on what is portability.

What is the definition of portability and when is it elected? Lisa M. Piehl: Okay. So if you're married, you have the right to port, what we call port is, if you didn't use your lifetime exclusion account, had death and everything is going, you have that available, you can give that exclusion amount to your spouse. So that it doesn't get lost. So basically a couple gets to use - let me check my math here, $12,920,000 million times two so which is, and that's a $25,840,000 million, if my math is good. So during - a married couple gets that amount. So if they don't use it during life, the first to die can transfer their unused amount to their spouse. I hope that helps with the question and when is it elected? It's elected at death. Portability is something that happens upon the first spouse to die. Veronica Tubman: Okay, sounds good. Sounds good. And I have one more question. Can the Form 709 be e-filed Lisa? Can it be e-filed? Lisa M. Piehl: I wish. We're working on that, but at this time all Estate and Gift Tax returns are paper-filed.

And I'm sorry. And we will try and get electronic filing at some point. We're really working hard to do that. But currently we still have to do paper filing. Sorry. Veronica Tubman: Okay, Lisa. Thank you. We had some really good questions and audience that's all the time we have for questions. I want to thank our presenter Lisa for sharing her knowledge and expertise and that for answering your questions. But before we close the Q&;A session, Lisa, what key points do you want these attendees to remember from today's webinar? Lisa M. Piehl: Well what I'd like you to remember is that, the personal representative has fiduciary duties related to the estate, including obtaining an EIN, filing income tax returns and filing any required estate or gift tax returns and paying any outstanding taxes. An estate tax return is due nine months after death and is required to report the transfer of property at death if the total of the decedent's lifetime transfers and transfers at death, less applicable deductions exceeds the basic exclusion amount of $12,920,000 million for 2023. Gift tax returns are filed annually, if they are due. So, they are only filed if you're required to make a filing, because you've exceeded the $17,000 or it's a future interest. The personal representative needs to be aware of other potential filing requirements such as those for portability and basis consistency. Estate tax closing letters are now requested electronically via Pay.gov. A variety of digital tools and services are available to assist you. Veronica Tubman: Okay. We appreciate you so much, Lisa. Thanks for those key points. Lisa M. Piehl: Thank you. Veronica Tubman: Audience. Audience, we are planning additional webinars throughout the year. To register for all upcoming webinars, please visit IRS.gov, keyword search, Webinars and select the Webinars for Tax Practitioners or Webinars for Small Businesses. When appropriate, we will offer Certificates and CE credits for upcoming webinars. We invite you to visit our video portal at www.irsvideos.gov, there you can view archived versions of our webinars. But please note, Continuing Education Credit or Certificates of Completion are not offered if you view any version of our webinars after the live broadcast. Again, we extend a big thank you to you for you spending your afternoon with us and a big thank you to Lisa for providing a great webinar, sharing her expertise and answering your questions. I also want to thank you our attendees for attending today's webinar: Estate and Gift Tax. If you attended today's webinar for at least 50 minutes from the official start of the webinar, you will qualify for one possible CE credit. Again, the time that we spent chatting and getting to know each other before the webinar started doesn't count towards the 50 minutes. If you're eligible for continuing education from the IRS and registered with your valid PTIN, your credit will be posted in your PTIN account. If you qualify and have not received your certificate and/or credit by February 21st, well reach back out to us via e-mail at cl.sl.web.conference.team@irs.gov and that's the e-mail that's shown right on the screen as well. If you are interested in finding out who your local stakeholder liaison is, you can just send us an e-mail using the address shown on the slide, and we'll send you the information that you need. We would really appreciate if you would just take a few minutes to complete a short survey before you exit. If you'd like to have more sessions like this one, well, let us know. If you have thoughts on how we can make them better, then please let us know that as well. If you have requests for future webinar topics or pertinent information you'd like to see in IRS Fact Sheet, Tax Tips or FAQ on IRS.gov, then please include your suggestions in the Comments section of the survey. Just click the survey button on the screen to begin. If it doesn't come up, click to make sure that you have disabled your pop-up blocker. And again, it has been a sincere pleasure to be here with you and on behalf of the Internal Revenue Service and our presenter, we would like to thank you for attending today's webinar. It's really important for the IRS to stay connected with the tax professional community, individual taxpayers, industry associations along with federal, state and local government organizations. You know you make our job a lot easier by sharing the information that allows for a proper tax reporting. Thanks again for taking time out of your day to attend today's webinar. We hope that you are well, we hope that you also have found the information helpful.

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