Section 6166(i) Overview

Section 6166(i) provides:

(i) Special rule for certain direct skips

To the extent that an interest in a closely held business is the subject of a direct skip (within the meaning of section 2612(c)) occurring at the same time as and as a result of the decedent's death, then for purposes of this section any tax imposed by section 2601 on the transfer of such interest shall be treated as if it were additional tax imposed by section 2001.

Section 2612(c) provides:

(c) Direct skip

For purposes of this chapter-

(1) In general

The term "direct skip" means a transfer subject to a tax imposed by chapter 11 or 12 of an interest in property to a skip person.

(2) Look-thru rules not to apply

Solely for purposes of determining whether any transfer to a trust is a direct skip, the rules of section 2651(f)(2) shall not apply.

IRS Rulings
PLR 200939003 The Generation-Skipping Transfer (GST) tax imposed on a taxable termination is not eligible for payment in installments under section 6166(i). Only the GST tax imposed on a direct skip occurring at the same time as and as a result of the decedent's death is eligible for payment of tax in installments pursuant to section 6166(i).
PLR 9314050 GST tax due on a taxable termination cannot be treated as tax imposed by section 2001 for purposes of section 6166(i), and cannot be paid in installments. However, payment of the GST tax can be extended under section 6161, as there is no distinction within section 6161 between one type of GST tax versus another.