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IRS’s New Estate Tax Return Retention Policy Could Cause Problems

November 22, 2021

The IRS’s decision to limit how long it retains estate tax returns to 40 years and to destroy all older returns could trigger some tricky situations for taxpayers: 

Michael Rudegeair of Anchin Accountants & Advisors…recalled a situation in which a client’s estate tax return had a trust, but the question whether the trust was includable in the surviving spouse’s estate depended on whether a qualified terminable interest property election had been made.

However, because the deceased spouse had died decades earlier and no one in the family had a copy of the old estate tax return, it wasn’t clear what should be done with the trust. If the IRS expunges the old files as it plans to do now, the answer to that kind of question may prove elusive.

Read the original article from Tax Notes.