IRS Grants Extension of Time to Make Election Out of Automatic Allocation of GST Tax

In a ruling request, taxpayer requested the IRS an extension of time to make an election out of the automatic allocation of generation-skipping transfer (GST) tax under the IRS Code §2632(c)(5). Section 2601 of the IRS Code imposes a tax on every GST, which includes a taxable distribution, a taxable termination and a direct skip.

Under Section 301.9100-3, an extension of time to make an election may be granted if a taxpayer acted reasonably and in good faith, and the taxpayer is deemed to have acted reasonably when he relied on a qualified tax professional and the tax professional failed to make the election.

Based on the facts, the IRS granted an extension of 120 days to elect out of the automatic allocation rules.
See PLR-102714-14 (Oct. 24, 2014).

Posted by Jin Keol Park, Associate Editor, Wealth Strategies Journal

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