The IRS, in IRS Notice 2007-90, 2007-46 IRB 1 (Oct. 29,2007), issued interim guidance and announced a change in its policy regarding IRC Section 6166 estate tax payment deferrals for estates consisting primarily of closely held business interests. Specifically, the IRS will now determine on a case-by-case basis whether security will be required when a qualifying estate makes a IRC Section 6166 election. This change stems from the Tax Court's decision on April 12, 2007, in Estate of Roski v. Commissioner, 128 T.C. 113 (2007), where the Tax Court held that the IRS had abused its discretion by requiring that all estates electing to pay the estate tax in installments under Section 6166 must provide a bond (or alternatively a special lien). In Roski v. Commissioner, the court found that it was Congress's intent that the IRS determine, on a case-by-case basis, that the government's interest is at risk prior to requiring security from an estate electing to pay the estate tax in installments under section 6166.
Posted by Monique Moreira, Associate Editor, Wealth Strategies Journal.
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