Taxes
AICPA Recommends Improvements to Regulations on Section 645, Election to Treat Trust as Part of an Estate
TD 9032 describes the procedures and requirements for making an election to have certain revocable trusts treated and taxed as part of an estate.
Apr. 21, 2023
The American Institute of CPAs (AICPA) has submitted suggestions for improvements to the Internal Revenue Service on the current section 645 final regulations election to treat a trust as part of an estate (TD 9032). These recommendations will simplify filing for taxpayers and practitioners and will reduce the administrative burden on the IRS as well.
TD 9032 describes the procedures and requirements for making an election to have certain revocable trusts treated and taxed as part of an estate. The Taxpayer Relief Act of 1997 added section 645 to the Internal Revenue Code to permit the election.
The AICPA recommends the following:
- Provide clarification of the “applicable date” of final determination.
- Simplify reporting for Form 8855 to require that it be filed as part of the initial estate income tax return rather than being filed separately.
- Provide guidance regarding the Section 642(c) deduction.
“These regulations have existed for over 20 years and need to be updated now that there is a new estate tax closing letter process,” said Eileen Sherr, AICPA Director, Tax Policy and Advocacy. “The regulations should be further clarified and the reporting simplified to make it easier for taxpayers to comply and the IRS to administer.”