The IRS announced this week that starting Oct. 28, a new $67 user fee will apply to any estate that requests a closing letter for its federal estate tax return.
The new user fee was authorized under final regulations, TD 9957, published on Sept. 28 in the Federal Register. Closing letter requests must be made using Pay.gov.
The IRS said it will provide further procedural details before the user fee goes into effect.
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. 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 has determined that issuing closing letters is a service that confers a special benefit warranting a user fee. That’s because, though obtaining a closing letter from the IRS can be helpful to an executor of an estate, it is not required by law.
The IRS noted that an estate still has the option of obtaining an account transcript from the IRS for free showing certain information from the estate tax return, comparable to the information found in a closing letter. Account transcripts are available online to registered tax professionals using the Transcript Delivery System (TDS) or to authorized representatives making requests using Form 4506-T.
As noted in the final regulations, account transcripts can be used to confirm that an estate tax return examination has been completed and the IRS file has been closed, which is the reason most often cited for requesting a closing letter.
