About Section 6166

IRC Section 6166 Interrelated Estate Tax Computations

This site is informational in nature. It deals with a narrow area of the law regarding installment payments of Federal estate tax. One should be familiar with the basic provisions of Federal estate tax law and Internal Revenue Code (IRC) section 6166 to benefit from the materials on this site. See IRC sections 2001 et seq.; section 6166; section 6324A; section 6601(j); and the regulations related to those Code sections. See Reg. section 20.6166-1; also see Reg. sections 20.6166A-1, 20.6166A-2, 20.6166A-3, and 20.6166A-4. The Code section links take you directly to the current US Code on the House of Representatives website. The Regulation links take you directly to the Code of Federal Regulations on the gpo fdsys website.

The American Taxpayer Relief Act of 2012 increased the maximum estate tax rate to 40% for estates of decedents dying in 2013 and later.

The materials on this website illustrate the distinctions among the four types of section 6166 deferral computations and the mechanics of such computations. There are observations about bifurcating Federal estate tax deferred under section 6166. A progressive series of computations under the four types of 6166 deferrals shows the consequences of underpayments or overpayments of non-deferred tax resulting from differences in the 6166 election statement language. The nuances in IRS examination deficiency computations in 6166 deferral cases are explored. Other computations illustrate the effects of interrelated Federal and state section 6166 elections on the computation of Federal and state tax and interest. Our table, Calculating the 2% Portion of Deferred Tax, shows how the maximum 2% portion of tax deferred under sections 6166(a) and (b)(10) is computed for dates of death from 1998 through today.

Other materials clarify IRS procedures regarding section 6166 cases. Some of the general Cincinnati Campus estate tax return processing steps are also discussed.

The primary focus in constructing this site has been to illustrate legal concepts through computation examples. Narrative descriptions of the methods used and choices that were made in arriving at the various computation results are included to clarify certain elements in the computations. Nowhere else on the Internet can one find comparable in-depth analyses of actual section 6166 computations. The computation examples presented on this site are the result of the author's many years of front-line experience at the IRS field examination level and working within IRS service center functions handling section 6166 accounts. The author has continued working with section 6166 computations for clients since his retirement from IRS in 2010. The computation examples on this website are therefore the most comprehensive illustrations available.