Starting October 28, a new $67 user fee will apply to any estate that requests an estate tax closing letter for its federal estate tax return. This closing letter is formally referred to as IRS Letter 627.
Background
By law, federal agencies are required to charge a user fee to cover the cost of providing certain services to the public that confer a special benefit to the recipient. Moreover, agencies must review these fees every two years to determine whether they are recovering the cost of these services. Under the final regulations, the IRS determined that issuing closing letters is a service that confers a special benefit warranting a user fee. Even though obtaining a closing letter from the IRS can be helpful to an executor of an estate, it is not required by law.
Account Transcripts
The estate has the option of obtaining from the IRS an account transcript, showing certain information from the estate tax return. It is comparable to that found in a closing letter and may be an acceptable substitute for the estate tax closing letter.
Account transcripts can be used to confirm that an estate tax examination has been completed and the IRS file has been closed. It is the reason that is most often cited for requesting a closing letter. They are available online (and free of charge) to registered tax professionals using the Transcript Delivery System (TDS) or authorized representatives making requests using Form 4506-T.
Closing Letters
Closing letter requests and payment of the user fee must be made using Pay.gov, a U.S. Department of the Treasury program, and a secure way to pay U.S. Federal Government Agencies.
Questions?
Please contact the office with any questions.
Any accounting, business or tax advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, we would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services.