IRS Adds Generation-Skipping Transfer Deadline Relief After 16 Years

The 2001 procedure requires a taxpayer to show the IRS that the “taxpayer acted reasonably and in good faith and that a grant of the requested relief will not prejudice the interests of the government.”

In the 2008 draft regulations, the IRS gave more details about how it would evaluate extension requests and how it wanted taxpayers to document that they were eligible for extensions.

Officials recommended that taxpayers seek extensions by asking the IRS for private letter rulings and submitting affidavit letters from parties that could confirm that they were eligible for extensions.

Getting an IRS private letter ruling now costs $3,000 for people with annual income under $250,000, $8,500 for people with income from $250,000 to $1 million, and $12,600 for people with income over $1 million, according to Internal Revenue Bulletin: 2024-1.

The final regulations: The new final regulations took effect Monday.

The regulations state that the old procedures for asking for a GST exemption allocation time extension no longer work.

Now, taxpayers seeking extensions must send in affidavits along with requests for private letter rulings; show that they are reasonable and acted in good faith; show that they intended to make timely allocation decisions or were unaware of the need to do so, despite being reasonably diligent; and, if relevant, show whether events beyond their control kept them from allocating the GST exemption on time.

Other facts that taxpayers can discuss include evidence of efforts to treat certain recipients of transfers in a consistent way and evidence that the taxpayers received bad advice from their tax advisors.

The IRS is planning to add more paragraphs indicating how approvals of extension requests will affect taxpayers.

It also hopes to add provisions for some taxpayers to apply for extensions without submitting requests for private letter rulings, but it says it needs to see the private letter ruling requests for now to get the information it needs to develop a simpler, private-letter-ruling-free process for at least some taxpayers.

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