Extension of Time to Pay Federal Estate Tax

Get Legal Help Today

secured lock Secured with SHA-256 Encryption

Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

Full Bio →

Written by Jeffrey Johnson
Insurance Lawyer Jeffrey Johnson

UPDATED: Jul 16, 2021

Advertiser Disclosure

It’s all about you. We want to help you make the right legal decisions.

We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about legal topics and insurance. Our goal is to be an objective, third-party resource for everything legal and insurance related. We update our site regularly, and all content is reviewed by experts.

Yes. The IRS may grant an extension to pay for a period of one year past the due date when reasonable cause exists. A 10-year extension to pay is discretionary. You apply for an extension to pay by filing Form 4768, Part III, and attaching it to your estate tax return Form 706. The extension of time to pay is only for the amount of the cash shortage. The reason for extension must be attached.

Examples of reasonable cause for not paying the estate tax on time include:

(1) the estate’s liquid assets are located in several jurisdictions and not immediately subject to the executor’s control;

(2) a substantial portion of the estate’s assets consist of rights to receive payments in the future (e.g., annuities, copyright royalties, accounts receivable);

(3) an estate includes a claim to substantial assets that cannot be collected without a lawsuit; and

(4) the estate would be forced to borrow at a higher interest rate than generally available to (1) pay the taxes, (2) provide a reasonable allowance during the administration period for the decedent’s surviving spouse and dependent children, and (3) satisfy the claims against the estate that are due.

If an extension is granted, interest is charged from the regular due date to the date of payment.

Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption