What Is an IRS Estate Closing Letter?

An IRS estate closing letter is an official document confirming the agency has accepted an estate’s federal tax return, Form 706. The letter’s function is to provide finality to the executor managing the deceased’s affairs, as it formally concludes the estate’s tax obligations with the IRS. For executors, receiving this letter is an important step that provides the assurance needed to distribute remaining assets to beneficiaries. It confirms the IRS is satisfied with the return as filed or as adjusted with the estate’s agreement.

Determining the Need for a Closing Letter

An estate closing letter is only relevant for estates required to file a federal estate tax return, known as Form 706, the United States Estate (and Generation-Skipping Transfer) Tax Return. The requirement to file this form is tied to the value of the decedent’s gross estate. The federal government sets a high estate tax exemption, and only estates with a gross value exceeding this amount must file a return.

The federal estate tax exemption amount is adjusted periodically for inflation. For 2025, the exemption is $13,990,000 per individual. If the total value of a person’s assets at death is less than this amount, a Form 706 is generally not required, and an estate closing letter is not applicable. This high exemption means most estates have no federal estate tax obligation.

A reason for filing Form 706 even when no tax is due is for “portability.” This rule allows a surviving spouse to use any of their deceased spouse’s unused estate tax exemption. To secure this benefit, the executor must file a Form 706 to report the unused amount, even if the estate’s value is below the filing threshold. This “portability only” filing is a common reason an executor will later request a closing letter.

How to Request the Estate Closing Letter

Once a Form 706 has been filed, the executor must proactively request the estate closing letter, as the IRS no longer issues them automatically. It is recommended to wait at least four to six months after filing before making the request. This waiting period allows the IRS time to process the Form 706 and conduct its initial review.

The IRS charges a user fee for an estate tax closing letter; for requests made after May 20, 2025, the fee is $56. An executor can request the letter and pay online through the Pay.gov website. Alternatively, a request can be made by mail to the IRS service center where the Form 706 was filed. The request must contain the decedent’s name, Social Security number, and date of death, as well as the estate’s Employer Identification Number (EIN) and the executor’s contact information.

As a free and often faster alternative, an executor can obtain an estate account transcript from the IRS. This document can frequently serve the same purpose as a closing letter for probate courts. The transcript provides a summary of the estate’s tax account activity. A transaction code of “421” with the description “Closed-examination of tax return” on the transcript indicates the IRS has accepted the return and closed its file.

Receiving and Using the Closing Letter

The receipt of an IRS estate closing letter signifies that the IRS has concluded its examination of the Form 706 and accepts the return as filed. It confirms that the federal estate tax liability has been satisfied and the agency will not seek additional tax. This finality is conditional, as the IRS can reopen the case if evidence of fraud, malfeasance, or significant misrepresentation of a material fact is discovered.

With the closing letter, the executor has the confidence to take the final steps in administering the estate. This includes making the final distributions of assets and property to heirs and beneficiaries. It also allows for the payment of any remaining administrative expenses without holding back significant reserves for potential tax liabilities.

The closing letter is often a required document for formally closing the estate in the relevant probate court. It serves as official proof that the estate’s federal tax obligations have been met, a prerequisite for the court to grant a final discharge of the executor’s duties. This release from the court absolves the executor from personal liability for the federal estate tax.