The Internal Revenue Service wants to formalize the system it uses to help taxpayers who say they need more time to allocate their generation-skipping transfer exemption.
The IRS is proposing to set regulations that would affect taxpayers who want to pass estates on to grandchildren, great-grandchildren or members of later generations.
In 2001, the IRS issued a notice, Notice 2001-50, which announced that transferors could seek an extension of time for allocating their generation-skipping exemption.
Many taxpayers have sought private letter rulings granting allocation exemptions, and now the IRS wants to create regulations that would replace the 2001 relief system, IRS officials write in a notice of proposed rulemaking that appears today in the Federal Register.
The IRS will consider factors such as the intent of the transferor, the occurrence of events beyond the control of the transferor, and the transferor’s lack of awareness of the need to allocate the exemption, official write.