Section 6166(d) provides:
Any election under subsection (a) shall be made not later than the time prescribed by section 6075(a) for filing the return of tax imposed by section 2001 (including extensions thereof), and shall be made in such manner as the Secretary shall by regulations prescribe. If an election under subsection (a) is made, the provisions of this subtitle shall apply as though the Secretary were extending the time for payment of the tax.
Regulation section 20.6166-1(b) provides:
(b) Time and manner of election. The election provided under section 6166(a) is made by attaching to a timely filed estate tax return a notice of election containing the following information:
(1) The decedent's name and taxpayer identification number as they appear on the estate tax return;
(2) The amount of tax which is to be paid in installments;
(3) The date selected for payment of the first installment;
(4) The number of annual installments, including the first installment, in which the tax is to be paid;
(5) The properties shown on the estate tax return which constitute the closely held business interest (identified by schedule and item number); and
(6) The facts which formed the basis for the executor's conclusion that the estate qualifies for payment of the estate tax in installments.
In the absence of a statement in the notice of election as to the amount of tax to be paid in installments, the date selected for payment of the first installment, or the number of installments, the election is presumed to be for the maximum amount so payable and for payment thereof in 10 equal installments, the first of which is due on the date which is 5 years after the date prescribed in section 6151(a) for payment of estate tax.
[T.D. 7710, 45 FR 50745, July 31, 1980]
6166(d) Comment 1: The Reg. 20.2061-1(b) default provision for an estate omitting information specified in items (2) through (4) from its notice of election could be significant in cases where there is an overpayment of non-deferred tax on the return due date. The Service would then be justified in assuming that the estate is electing to defer the maximum amount of tax eligible for deferral and in treating the overpayment of non-deferred tax as a prepayment of the tax payable in installments. In most cases, however, the Service will simply consider the estate to have elected to defer only the unpaid balance of tax, not the greater amount equal to the maximum amount of tax eligible for deferral under section 6166.
|6166(d) Comment 2: If the election statement omits items 5 or 6, the general practice has been for Cincinnati Campus to correspond with the executor to obtain the missing information while the return is being processed and the tentative section 6166 billing account is being set up. However, see the Tax Court opinion in Estate of Wallace R. Woodbury v. Commissioner, where the court held that this regulation is subject to a substantial compliance standard, which the Woodbury estate did not meet because information for items (5) and (6) had been omitted from the election statement. But this point was moot in any event because the Woodbury estate filed the return some 2 1/2 years late, which was fatal to its section 6166 election; the timely fiing requirement is statutory (section 6166(d)), and a substantial compliance standard cannot be applied to a statutory election requirement.|
|6166(d) Comment 3: This regulation was published before the enactment of sections 6166(b)(8)(B)(ii) and 6166(b)(10), which provide for a maximum of only 5 installments. Section 6166(b)(8)(B)(ii) relates to a holding company election where only the holding company stock is non-readily tradable within the meaning of section 6166(b)(7)(B), and section 6166(b)(10) relates to stock in a qualifying lending and finance business. The regulation has to be read in light of these two subsequently enacted Code provisions so that the maximum amount is payable in either 5 or 10 installments, the first of which is due on the return due date.|
|6166(d) Comment 4: Notices of Election filed with estate tax returns often contain lengthy narrative explanations of the facts forming the basis for the executor's conclusion that the estate qualifies for payment of the estate tax in installments.|