Looking for a Form 706 Templates? Download it for free!

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Enter “Supplemental Information”

reasonable cause. Executors filing late

Internal Revenue Bulletins.

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across the top of page 1 of the form;

(after the due date, including

Toll-free and email technical support.

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and

extensions) should attach an

The DVD is released twice during the

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Attach a copy of pages 1, 2, and 3 of

explanation to the return to show

year.

the original Form 706 that has already

reasonable cause.

— The first release will ship the

been filed.

Valuation understatement. Section

beginning of January 2009.

6662 provides a 20% penalty for the

— The final release will ship the

If you have already been notified

underpayment of estate tax that

beginning of March 2009.

that the return has been selected for

exceeds $5,000 when the under-

examination, you should provide the

Purchase the DVD from National

payment is attributable to valuation

additional information directly to the

Technical Information Services (NTIS)

understatements. A valuation

office conducting the examination.

at for $30 (no

understatement occurs when the value

handling fee) or call 1-877-233-6767

of property reported on Form 706 is

Supplemental Documents

toll-free to purchase the DVD for $30

65% or less of the actual value of the

(plus a $5 handling fee). The price is

Note. You must attach the death

property.

discounted to $25 for orders placed

certificate to the return.

This penalty increases to 40% if

prior to December 1, 2008.

there is a gross valuation under-

If the decedent was a citizen or

Forms and Publications to file or

statement. A gross valuation under-

resident and died testate, attach a

use.

statement occurs if any property on the

certified copy of the will to the return. If

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Forms. The title for forms to file or

return is valued at 40% or less of the

you cannot obtain a certified copy,

use are given within these instructions.

value determined to be correct.

attach a copy of the will and an

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Publications. Publication 910, Guide

explanation of why it is not certified.

These penalties also apply to late

to Free Tax Services; and Publication

Other supplemental documents may be

filing, late payment, and underpayment

559, Survivors, Executors, and

required as explained below. Examples

of GST taxes.

Administrators.

include Forms 712, 709, and 706-CE,

Return preparer. The Small Business

trust and power of appointment

and Work Opportunity Tax Act of 2007

instruments, death certificate, and state

(Act) extends the application of return

Specific Instructions

certification of payment of death taxes.

preparer penalties to preparers of

If you do not file these documents with

estate tax returns. Under section 6694,

You must file the first three pages of

the return, the processing of the return

as amended by the Act, and the

Form 706 and all required schedules.

will be delayed.

transitional relief provided by Notice

File Schedules A through I, as

2007-54, 2007-27 I.R.B. 12, estate tax

If the decedent was a U.S. citizen

appropriate, to support the entries in

return preparers, who prepare any

but not a resident of the United States,

items 1 through 9 of Part

return or claim for refund which reflects

you must attach the following

5 — Recapitulation.

documents to the return:

an understatement of tax liability due to

willful or reckless conduct, are subject

1. A copy of the inventory of

IF . . .

THEN . . .

to a penalty of $5,000 or 50% of the

property and the schedule of liabilities,

income derived (or income to be

you enter zero on any

you need not file the

claims against the estate, and

derived), whichever is greater, for the

item of the

schedule (except for

expenses of administration filed with

Recapitulation,

Schedule F) referred to

preparation of each such return. See

the foreign court of probate jurisdiction,

on that item.

section 6694, Notices 2007-54, and

certified by a proper official of the court;

2008-13, 2008-3 I.R.B. 282.

2. A copy of the return filed under

you claim an exclusion complete and attach

the foreign inheritance, estate, legacy,

on item 11,

Schedule U.

Obtaining Forms and

succession tax, or other death tax act,

certified by a proper official of the

you claim any

complete and attach the

Publications To File or Use

deductions on items 13 appropriate schedules to

foreign tax department, if the estate is

through 21 of the

support the claimed

Internet. You can access the IRS

subject to such a foreign tax; and

Recapitulation,

deductions.

website 24 hours a day, 7 days a week

3. If the decedent died testate, a

at to:

certified copy of the will.

you claim the credits

complete and attach

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Download forms, instructions, and

for foreign death taxes Schedule P or Q.

or tax on prior

publications;

Rounding Off to Whole

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transfers,

Order IRS products online;

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Dollars

Research your tax questions online;

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there is not enough

attach a Continuation

Search publications online by topic or

You may show the money items on the

space on a schedule to Schedule (or additional

keyword; and

list all the items,

sheets of the same size)

return and accompanying schedules as

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to the back of the

whole-dollar amounts. To do so, drop

schedule;

tax news by email.

any amount less than 50 cents and

(see the Form 706

DVD for tax products. You can order

increase any amount from 50 cents

package for the

Publication 1796, IRS Tax Products

through 99 cents to the next higher

Continuation Schedule);

DVD, and obtain:

dollar.

photocopy the blank

•

Current-year forms, instructions, and

schedule before

completing it, if you will

publications.

Penalties

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need more than one

Prior-year forms, instructions, and

copy.

Late filing and late payment. Section

publications.

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6651 provides for penalties for both late

Tax Map: an electronic research tool

filing and for late payment unless there

and finding aid.

Also consider the following:

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is reasonable cause for the delay. The

Tax Law frequently asked questions.

Form 706 has 40 numbered pages.

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law also provides for penalties for willful

Tax Topics from the IRS telephone

The pages are perforated so that you

attempts to evade payment of tax. The

response system.

can remove them for copying and filing.

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late filing penalty will not be imposed if

Internal Revenue Code — Title 26.

Number the items you list on each

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the taxpayer can show that the failure

Fill-in, print, and save features for

schedule, beginning with the number

to file a timely return is due to

most tax forms.

“1” each time, or using the numbering

-3-

General, Specific, and Part Instructions

Instructions For Form 706 - United States Estate (And Generation-Skipping Transfer) Tax Return - 2008 Page 3

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