What IRS Form 706 (2017) Is For

Form 706 is the federal estate tax return that must be filed when someone dies and leaves behind a large estate. For deaths in 2017, you must file this form if the deceased person's gross estate plus any large gifts they made during their lifetime totals more than $5,490,000 (IRS Instructions for Form 706 (2017)). You also must file Form 706 regardless of estate size if you want to transfer any unused estate tax exemption to a surviving spouse—this is called the "portability election."

When You'd Use Form 706 for 2017 (Late or Amended Filing)

You might be filing Form 706 for a 2017 death years later for several reasons. Perhaps you received an IRS notice stating that a return should have been filed, or you discovered assets that pushed the estate over the $5,490,000 threshold. Maybe you initially thought no return was required but now want to make the portability election to preserve the unused exemption for the surviving spouse. Late filers often face these situations after receiving IRS correspondence, discovering overlooked assets, or realizing the benefits of portability. Unlike income tax refunds, estate tax matters don't have the same statute of limitations concerns, but penalties and interest continue to accrue on any unpaid tax.

Key Rules Specific to 2017

The 2017 estate tax exemption was $5,490,000, significantly lower than today's exemption amounts. This means estates that wouldn't require filing today may have needed to file for 2017. The portability election rules were also more restrictive—executors had only until January 2, 2018, or the second anniversary of death (whichever was later) to file under a special extension procedure outlined in Rev. Proc. 2017-34 (IRS Instructions for Form 706 (2017)). For 2017, the generation-skipping transfer tax exemption ceiling for special-use valuation was $1,120,000, and the threshold for estate tax installment payments was $1,490,000.

Step-by-Step (High Level)

• Gather your records: Obtain estate tax account transcripts from the IRS using Form 4506-T to see what they have on file, collect all asset valuations as of the date of death, and assemble any prior gift tax returns (Form 709).
  
  
• Complete Form 706 (2017 version): Use only the August 2017 revision of Form 706 for 2017 deaths, not current forms, as tax law changes make older forms necessary for accuracy.
  
  
• Attach required schedules: Include death certificate, certified copy of will, and complete all applicable schedules (A through U) based on estate assets and deductions claimed.
  
  
• Mail properly: Send to Department of Treasury, Internal Revenue Service Center, Cincinnati, OH 45999, or use private delivery services like FedEx or UPS with tracking.
  
  
• Keep detailed copies: Maintain complete copies of everything filed, as estate tax examinations can occur years later.
  
  

Common Mistakes and How to Avoid Them

• Using the wrong form year: Always use the 2017 version of Form 706 for 2017 deaths, as tax rates and rules differ between years.
  
  
• Forgetting the portability election: If there's a surviving spouse, decide whether to make the portability election; write your intent clearly on the return.
  
  
• Incomplete asset valuation: Don't estimate values casually—the IRS imposes 20% penalties if your reported values are 65% or less of actual values, and 40% penalties if 40% or less (IRS Instructions for Form 706 (2017)).
  
  
• Missing documentation: Attach the death certificate, certified will copy, and any required supporting forms like Form 712 for life insurance or Form 709 copies for prior gifts.
  
  
• Inadequate records: Maintain detailed documentation of all valuations, appraisals, and calculations, as the IRS can examine returns years later.
  
  
• Late filing without explanation: While you can't avoid penalties by attaching explanations when filing, be prepared to demonstrate "reasonable cause" if the IRS assesses penalties later.
  
  

What Happens After You File

The IRS will process your return, which typically takes several months for estate tax returns. You'll receive acknowledgment of receipt, and they may request additional information or documentation. If you owe tax, you can request a payment plan using Form 9465 (Installment Agreement Request) or explore other payment options (IRS.gov). The IRS no longer automatically issues closing letters, so you must specifically request one if needed for estate administration. If the IRS disagrees with your return, you'll receive a notice explaining proposed changes, and you have appeal rights through the IRS Independent Office of Appeals. Interest continues accruing on any unpaid tax from the original due date.

FAQs

What penalties apply to late filing of Form 706 for 2017?

Section 6651 imposes penalties for late filing and late payment unless you can show reasonable cause. The penalty continues until you file, but you can request penalty relief later by demonstrating reasonable cause (IRS Instructions for Form 706 (2017)).

Can I still make the portability election for a 2017 death?

The normal deadline has passed, but you may seek relief under Treasury Regulations section 301.9100-3 by demonstrating reasonable cause for the delay.

How do I get estate tax transcripts?

Use Form 4506-T to request transcripts from the IRS, or authorized representatives can access them through the Transcript Delivery System online (IRS.gov).

Is there a statute of limitations for estate tax refunds?

Generally, you have three years from the due date (including extensions) to claim refunds, but special rules may apply depending on circumstances.

Do I need to amend state estate tax returns too?

Check with each relevant state, as state estate tax laws vary significantly and may have different requirements than federal returns.

What if I discover additional assets after filing?

File an amended return by preparing a new Form 706, writing "Supplemental Information" across the top, and attaching copies of the original return's first four pages (IRS Instructions for Form 706 (2017)).

Can estate tax be paid in installments?

Yes, if the estate qualifies under section 6166 (closely held business interest) or you can request a regular payment plan using Form 9465 (IRS.gov).

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