The Internal Revenue Service (IRS) has officially reduced the user fee for Estate Tax Closing Letters (Letter 627) from $67 to $56, effective July 1, 2025. This change is outlined in IRS Notice 2024-45 and aims to reduce the financial and administrative burden on estate executors and fiduciaries during an already stressful process.
Read the official IRS Notice here
This advancement signifies progress in the IRS’s continued efforts to enhance the efficiency of estate administration and is especially advantageous for families and professionals dealing with the complexities of estate tax. As a reliable CPA advisory company based in the USA, Virtue CPAs is ready to assist you in grasping what this alteration entails and how it affects your tax strategy.
Key Points:
Charge Decrease:
- The fee for the Estate Tax Closing Letter has been decreased to $56, previously set at $67.
- This pertains to Form 706 (U.S. Estate Tax Return) submitted for deceased individuals whose estate is liable for federal estate tax.
Aim of the Letter:
The IRS Letter 627 acts as official verification that the IRS has approved the submitted estate tax return and has no intention of taking additional measures, which is frequently needed by state courts, financial entities, and heirs.
Did You Know?
Instead of paying for Letter 627, executors can request an Account Transcript showing transaction code “421”, which signifies that the IRS examination of the estate tax return is complete.
- Free of charge
- Available through the IRS Transcript Delivery System
- Accepted by many institutions as proof of closure
“421 – Closed examination of tax return” serves as equivalent evidence of IRS acceptance.
This is a great option for estates looking to reduce administrative costs further while maintaining compliance.
Importance of This for Estate Executors and Families
1. Reduced Administrative Expenses:
For estate administrators and legal representatives, this translates to lower expenses when managing estates with considerable federal tax liabilities.
2. Enhanced Productivity:
Requesting the Estate Tax Closing Letter has become easier and more streamlined with digital options accessible through the IRS’s Pay.gov platform.
3. Improved Organization and Completion:
The closing letter is frequently a crucial document to complete estate administration. Reduced fees and improved access facilitate quicker resolutions for families and fiduciaries.
What Steps Should You Take?
At Virtue CPAs, we counsel estate representatives to:
1. Evaluate Your Estate Plans:
If you are now overseeing or organizing an estate liable for federal tax, use this chance to review your submissions and closing letter strategies.
2. Submit Files Electronically Whenever You Can:
The IRS highly recommends obtaining the closing letter via Pay.gov, as it is quicker and more efficient than sending paper requests by mail.
3. Consult a Tax Professional:
While the fee decrease is a welcome change, navigating estate taxes can still be complex. Partnering with the experienced tax professionals at Virtue CPAs ensures accurate compliance and a strategic approach to your estate tax filings.
Require assistance with estate tax filing or have inquiries regarding the closing letter?
SCHEDULE A TAX CONSULTATION TODAY or call us at (678) 952-9001
Our qualified experts are prepared to assist you with precise tax preparation, estate management, and compliance guidance to your specific requirements.