Under a section 6161 extension of time to pay estate tax, a deduction for 100% of the interest calculated on the tax the time for payment of which has been so extended is interrelated with the computation of the estate tax itself. Section 6166 is not involved (but see below). There are several distinct elements with regard to section 6161 computations that must be kept in mind:

• A section 6161 request for an extension of time to pay is generally made on Form 4768.
• Approval of a section 6161 request for an extension of time to pay is granted for one year only.
• A request for an additional extension year must be filed before the previous extension period expires.
• The maximum number of extensions is:
  • 10 years maximum (in one-year increments) on the tax shown due on the estate tax return, calculated from the return due date determined without regard to any extensions of time to file (section 6161(a)(2)(A));
  • 10 years maximum (in one-year increments) on any part of an installment due under a section 6166 election, calculated from the date the installment payment is due (section 6161(a)(2)(B)); or,
  • 4 years maximum (in one-year increments) on any part of an estate tax deficiency, calculated from the date fixed for payment of the deficiency (section 6161(b)(2)).
• All of the interest accrued on unpaid tax and interest is deductible on Schedule J of the estate tax return. This means that the total tax decreases as additional interest accrues and supplemental estate tax returns are filed pursuant to Rev. Proc. 81-27. However, the IRS will not sua sponte reduce the tax - the estate must file a supplemental estate tax return or a claim on Form 843, Claim for Refund or Request for Abatement, to claim the additional interest as a new deduction. (A Form 843 filed before the tax has been fully paid will be treated as a supplemental return rather than as a claim per se. See Rev. Proc. 81-27.)
• Collection Advisory determines whether or not to grant a request for an extension of time to pay. There is no guarantee that they will grant extensions for the maximum of 10 years.
• Collection Advisory might request that collateral (or additional collateral) be posted to protect the government's interest.