AICPA Comments on Proposed Regulations on Portability Election and Some Practitioners’ Plans 

    by Eileen Sherr 
    Published September 21, 2012

    On September 14, AICPA submitted comments to IRS on the proposed regulations regarding portability of the deceased spousal unused exclusion (DSUE) amount.  AICPA appreciated the guidance and said it was hopeful that Congress will permanently extend the portability rules to allow taxpayers and practitioners to rely on the rules in spousal estate planning.  In the comments, AICPA requested:

    • Permanent extension of the temporary relief in Notice 2012-21,

    • A short Form 706-EZ to make portability election, and

    • That a surviving spouse should be able to file for portability if the executor does not. 

    Further, the recent IRS temporary regulations regarding portability provide that the portability election is automatically made by timely filing a complete and properly prepared federal estate tax return.  According to the temporary regulations, an estate tax return is considered complete and properly prepared if it is prepared in accordance with the Form 706 instructions (add link) and if the requirements of sections 20.6018-2, 3, and 4 are met. 

    We have been told that some practitioners plan to file an affirmative portability election with the estate tax return in an attempt to protect the taxpayer if it is determined that the return is not complete or properly prepared.  Such an affirmative election is not required or even mentioned in the temporary regulations, and we are unsure of what effect it may have.  Nevertheless, we wanted to pass along this information concerning what some practitioners are planning to do.

    Various resources regarding portability are available on the AICPA Portability Resource Page, including a sample client letter that is available to send to surviving spouses and family with 2011 and 2012 deaths.

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