A delinquent estate-tax return likely does not start the assessment clock until the correct service center receives it

Plain-English summary

This Chief Counsel email addresses when the three-year assessment clock starts for a late-filed estate tax return (Form 706) that an estate mailed to the wrong IRS location instead of the designated Kansas City Service Center. Under the "meticulous compliance" rule (Winnett v. Commissioner), a return is not treated as "filed," and the limitations period does not begin, until it reaches the office designated to receive it, so the clock likely did not start until Kansas City received the return. The advice cautions, however, that a court could find the clock started earlier if the estate reasonably followed the filing instructions in effect for the year of death. This is internal legal analysis for IRS personnel, not a taxpayer ruling.

Ruling snapshot

• Question: When does the assessment period begin for a delinquent Form 706 that was delivered to an office other than the designated service center?
• Outcome: Advice given (likely not until the correct service center receives it, though a court could find otherwise)
• Key authorities: IRC §§ 6501, 6091(b)(3), 6018; Treas. Reg. §§ 20.6018-1, 20.6091-1; Winnett v. Commissioner, 96 T.C. 802

Full text (IRS public release)

ID: CCA_2021081815135950 [Third Party Communication:

UILC: 6018.00-00, 6091.04-00 Date of Communication: August 18, 2021]

Number: 202202011
Release Date: 1/14/2022
From: --------------------
Sent: Wednesday, August 18, 2021 3:13:59 PM
To: -----------------
Cc: ----------------
Bcc: --------------------
Subject: RE: Statute of Limitations Issue - Delinquent Form 706

Hi -------,

You have asked whether the statute of limitations for assessment for a delinquent Form 706 for --------begins to run when the return was delivered to the -------------------------------
---------, when it was subsequently received in a field office, or some other date.

As we understand, the decedent died on ------------------. The estate’s CPA mailed a delinquent Form 706 to the -----------------------------------in ----------------------and the USPS tracking results show the return was delivered on -------------------------. IRS transcripts do not reflect that the Form was forwarded to the Service Center currently responsible for processing Forms 706 (Kansas City). After sending the delinquent return to -----------
-------------, the estate also sent a box that included the Form 706 to a field office in -------
----------- and tracking shows the box was delivered -----------------.

Analysis: An estate tax return, if required, must be filed on Form 706. Treas. Reg. § 20.6018-1(a). Estate tax returns must be filed in the internal revenue district in which was the domicile of the decedent at the time of his death, or at the service center designated in the regulations. I.R.C. § 6091(b)(3). Treas. Reg. § 20.6091-1 provides the estate return shall be filed with the service center serving the location in which the decedent was domiciled at the time of his death, if the instructions applicable to the estate tax return provide that the return shall be filed with a service center. Notice 2010-53 updates filing locations listed in regulations and provides that filing locations may be found on the IRS website, or in the current IRS forms, instructions to forms, and publications. Since July 1, 2019, the correct address to file Forms 706 is the IRS Service Center in Kansas City, Missouri. This address is reflected on the IRS.gov website and in the most recent instructions to Form 706 released in September 2020.

In Winnett v. Commissioner, the Tax Court addressed the “meticulous compliance” required of taxpayers filing a return to commence the running of the statute of limitations. 96 T.C. 802, 808, (1991) (quoting Lucas v. Pilliod Lumber Co., 281 U.S. 245 (1930)). The court held that a return is not deemed “filed” until it is received by the revenue office designated to receive such return. Id. Thus, under the holding in Winnett, the assessment statute would not commence until the delinquent Form 706 2

has been received by the Kansas City Service Center consistent with the instructions on IRS.gov.

Notwithstanding the compliance required by Winnett, it is possible a court could find the running of the assessment statute to have commenced when the Form 706 was received by the ----------------------------------. The current Form 706 and current instructions state that they are for use by “decedents dying after December 31, 2019.” The instructions further direct estates to file the applicable Form 706 for the calendar year in which the decedent died. The instructions for the Form 706 for the -----
-------calendar year direct taxpayers to file the Form 706 with ------------------------------------
---------. A court could find the estate was reasonable in filing the Form 706 consistent with these instructions.

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Please let us know if you have any additional questions.

Thank you,
Jessica

Jessica C. Chase
Office of Chief Counsel, CC:P&A:Br01
Internal Revenue Service
1111 Constitution Avenue NW
Washington, DC 20224
Telephone: 202-317-5224
Email address: [email protected]