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If the decedent was a U.S. citizen but not a resident of the United States, you must attach the following documents to the return. 1. A copy of the inventory of property and the schedule of liabilities, claims against the estate, and expenses of administration filed with the foreign court of probate jurisdiction, certified by a proper official of the court. 2. A copy of the return filed under the foreign inheritance, estate, legacy, succession tax, or other death tax act, certified by a proper official of the foreign tax department, if the estate is subject to such a foreign tax. 3. If the decedent died testate, a certified copy of the will. Rounding Off to Whole Dollars You may round off cents to whole dollars on the return and schedules. If you do round to whole dollars, you must round all amounts. To round, drop amounts under 50 cents and increase amounts from 50 to 99 cents to the next dollar. For example, $1.39 becomes $1 and $2.50 becomes $3. Penalties Late filing and late payment. Section 6651 provides for penalties for both late filing and for late payment unless there is reasonable cause for the delay. The law also provides for penalties for willful attempts to evade payment of tax. The late filing penalty will not be imposed if the taxpayer can show that the failure to file a timely return is due to reasonable cause. Reasonable-cause determinations. If you receive a notice about penalties after you file Form 706, send an explanation and we will determine if you meet reasonable-cause criteria. Do not attach an explanation when you file Form 706. Explanations attached to the return at the time of filing will not be considered. Valuation understatement. Section 6662 provides a 20% penalty for the underpayment of estate tax that exceeds $5,000 when the underpayment is attributable to valuation understatements. A valuation understatement occurs when the value of property reported on Form 706 is 65% or less of the actual value of the property. This penalty increases to 40% if there is a gross valuation understatement. A gross valuation understatement occurs if any property on the return is valued at 40% or less of the value determined to be correct. Penalties also apply to late filing, late payment, and underpayment of GST taxes. Return preparer. Estate tax return preparers who prepare any return or claim for refund which reflects an understatement of tax liability due to an unreasonable position are subject to a penalty equal to the greater of $1,000 or 50% of the income earned (or to be earned) for the preparation of each such return. Estate tax return preparers who prepare a return or claim for refund which reflects an understatement of tax liability due to willful or reckless conduct are subject to a penalty of $5,000 or 75% of the income earned (or income to be earned), whichever is greater, for the preparation of each such return. See sections 6694(a) and 6694(b), the related regulations, and Ann. 2009-15, 2009-11 I.R.B. 687, available at IRS.gov/pub/irs-irbs/irb09-11.pdf, for more information. Consistent basis reporting. Certain estates are required to report to the IRS and the recipient the estate tax value of each asset included in the gross estate within 30 days of the due date (including extensions) of Form 706 or the date of filing Form 706 if the return is filed late. The basis of certain assets when sold or otherwise disposed of must be consistent with the basis (estate tax value) of the asset when it was received by the beneficiary. To satisfy the consistent basis reporting requirements, the estate must file Form 8971, Information Regarding Beneficiaries Acquiring Property From a Decedent. See Form 8971 and its instructions for more information. Obtaining Forms and Publications To File or Use Internet. You can access the IRS website 24 hours a day, 7 days a week at IRS.gov to: • Download forms, instructions, and publications; • Order IRS products online; • Research your tax questions online; • Search publications online by topic or keyword; and • Sign up to receive local and national tax news by email. Other forms that may be required. • Form SS-5, Application for a Social Security Card. • Form 706-CE, Certificate of Payment of Foreign Death Tax. • Form 706-NA, United States Estate (and Generation-Skipping Transfer) Tax Return, Estate of nonresident not a citizen of the United States. • Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return. • Form 712, Life Insurance Statement. • Form 2848, Power of Attorney and Declaration of Representative. • Form 4768, Application for Extension of Time To File a Return and/or Pay U.S. Estate (and Generation-Skipping Transfer) Taxes. • Form 4808, Computation of Credit for Gift Tax. • Form 8821, Tax Information Authorization. • Form 8822, Change of Address. • Form 8971, Information Regarding Beneficiaries Acquiring Property From a Decedent. Additional Information. Pub. 559, Survivors, Executors, and Administrators, may assist you in learning about and preparing Form 706. Closing letter procedure. Estate closing letters will not be issued unless requested by the executor of the estate or the designated power of attorney. To allow time for processing, please wait at least 9 months after filing Form 706 to request a closing letter. Instead of an estate tax closing letter, the executor of the estate may request an account transcript, which reflects transactions including the acceptance of Form 706 and the completion of an examination. Account transcripts are available online to registered tax professionals using the Transcript Delivery System (TDS) or to authorized representatives making requests using Form 4506-T. Specific instructions are available for requesting online transcripts using the TDS or hardcopy transcripts using Form 4506-T. For questions about estate tax closing letter requests, go to Frequently Asked Questions on Estate Taxes, and refer to the questions related to closing letters. Note. For information about the release of nonresident U.S. citizen decedents' assets using transfer certificates under Regulations section 20.6325-1, go to Transfer Certificate Filing Requirements for the Estates of Nonresident Citizens of the United States or write to: Internal Revenue Service Center Attn: E&G, Stop 824G 7940 Kentucky Drive Florence, KY 41042-2915 -4- Instructions for Form 706 (Rev. 09-2021)