Very Limited 9100 Relief for Late-Filed 6166 Elections

Very Limited Section 9100 Relief is Available for a Late-Filed Section 6166 Election

There is no 9100 relief for a section 6166 election in the case of a late-filed return. This relief is available only for a late-filed section 6166 election. The return must be timely filed by the regular return due date 9 months after the date of death. A section 6081 extension of time to file must not have been requested on Form 4768. Further, neither a section 6166 election nor a section 6166 protective election must have been made on the timely-filed return (since either election would render moot a request for section 9100 relief). Finally, this section 9100 relief is available only if it is requested within 6 months of the regular return due date.

Section 6166(d) provides:

(d) Election

Any election under subsection (a) shall be made not later than the time prescribed by section 6075(a) for filing the return of tax imposed by section 2001 (including extensions thereof), and shall be made in such manner as the Secretary shall by regulations prescribe. If an election under subsection (a) is made, the provisions of this subtitle shall apply as though the Secretary were extending the time for payment of the tax.

The question occasionally arises whether a section 6166 election can be allowed if the estate tax return is filed late. A series of Letter Rulings have consistently held that a section 6166 election submitted with a late-filed return is invalid. In this vein, perhaps the most instructive is PLR 201015003, which was released April 16, 2010. This ruling addresses whether elections under sections 2032A, 2057, and 6166 can be allowed, as well as whether penalties otherwise assessable under section 6651 can be avoided. The important point in this ruling is that, once again, the return was filed more than 6 months after the original return due date (and several years after the approved extended return filing due date), and the section 6166 election was not allowable pursuant to Regulation 301.9100-3. Also see our discussion of Estate of Wallace R. Woodbury v. Commissioner, T.C. Memo 2014-66.

The elections under sections 2032A and 2057 were allowable, however, even though the return had been filed many years late (an extension of time to file the return was approved, but the first practitioner never filed the return). The duty to timely file the return was non-delegable and the section 6651 penalties for failure to file and failure to pay were assessable.

The most instructive part of this ruling is footnote 1 at the bottom of page 5:

Treas. Reg §301.9100-2 does allow for an automatic six month extension for statutory elections in certain circumstances. Though this section allows for extensions of statutory elections, it is inapplicable in this case because, even if the estate qualified for relief under this section, this section allows only a six month extension. In this case, the estate missed the deadline to make the election under §6166 by over x years.

[Also see two Chief Counsel email Advices that were issued June 24, 2011 - CCA 201125019 and CCA 201125020. Again, in each CCA the estate failed to file the §6166 election within 6 months of the original return due date. Counsel concluded that the estate's late-filed §6166 election therefore did not qualify under Reg. sections  301.9100-2(b) and 301.9100-3.]

Reg. §301.9100-2 provides:

(b) Automatic 6-month extension. An automatic extension of 6 months from the due date of a return excluding extensions is granted to make regulatory or statutory elections whose due dates are the due date of the return or the due date of the return including extensions provided the taxpayer timely filed its return for the year the election should have been made and the taxpayer takes corrective action as defined in paragraph (c) of this section within that 6-month extension period. This paragraph (b) does not apply to regulatory or statutory elections that must be made by the due date of the return excluding extensions.

(c) Corrective action. For purposes of this section, corrective action means taking the steps required to file the election in accordance with the statute or the regulation published in the Federal Register, or the revenue ruling, revenue procedure, notice, or announcement published in the Internal Revenue Bulletin (see §601.601(d)(2) of this chapter). For those elections required to be filed with a return, corrective action includes filing an original or an amended return for the year the regulatory or statutory election should have been made and attaching the appropriate form or statement for making the election. Taxpayers who make an election under an automatic extension (and all taxpayers whose tax liability would be affected by the election) must file their return in a manner that is consistent with the election and comply with all other requirements for making the election for the year the election should have been made and for all affected years; otherwise, the IRS may invalidate the election.

(d) Procedural requirements. Any return, statement of election, or other form of filing that must be made to obtain an automatic extension must provide the following statement at the top of the document: “FILED PURSUANT TO §301.9100-2”. Any filing made to obtain an automatic extension must be sent to the same address that the filing to make the election would have been sent had the filing been timely made. No request for a letter ruling is required to obtain an automatic extension. Accordingly, user fees do not apply to taxpayers taking corrective action to obtain an automatic extension.

There is no 9100 relief available if the original return is not timely filed. Reg. section 301.9100-2 relief is available only if an estate has timely filed a return. If the estate failed to make a section 6166 election on the timely filed return it can still obtain a section 6166 deferral if a supplemental estate tax return is filed timely (i.e. within 6 months of the original return due date (determined without regard to any extension of time to file)) with the section 6166 notice of election.

See IRM, which provides:

3.  The election to pay in installments must be made on a timely filed Form 706 on page 2, Part 3 Elections by the Executor, Line 3 and by attaching a notice of election to the return containing the information specified in Treas. Reg. § 20.6166-1(b). Late filing of the return invalidates the election. However, if a return is timely filed without the election but an amended return containing the election is filed within 6 months of the unextended due date of the Form 706, the election is considered timely.

Limited 9100 Relief Comment 1:   There are only 3 methods by which a section 6166 election can be made.
1. By attaching an election statement to a timely filed estate tax return. Reg. §20.6166-1(b) states that the "election provided under section 6166(a) is made by attaching to a timely filed return a notice of election . . . "
2. By filing a section 6166 election under section 6166(h) when a deficiency has been assessed, but only if:
The original return was filed without a section 6166 election or a protective section 6166 election.
3. By attaching an election statement to a supplemental estate tax return, but only if the following conditions are satisfied:
a. An original estate tax return was timely filed on the statutory return due date.
b. Form 4768 was not filed to request an automatic 6-month extension of time to file (the actual return filing (on the date received by IRS) would constitute the end of the extension period had a Form 4768 been filed earlier, and a subsequent supplemental return would therefore not be timely. See, e.g. IRM, which provides:
An extended due date is not treated like the regular due date. The filing is not considered early when the taxpayer does not use the full extension period. A timely return received before the end of the extension period (including postponement for disaster relief and combat zone) is considered filed on the received date, not on the extended due date. ).
c. The supplemental return is annotated “FILED PURSUANT TO §301.9100-2” and is filed within 6 months of the statutory return due date (determined without regard to any extensions of time to file).