In Est. of Agnes Skeba v. US, 2019-2 USTC ¶60,717 (Oct. 3, 2019), the US District Court for the District of New Jersey applied a de novo standard of review to determine whether an estate demonstrated reasonable cause and not willful neglect in failing to timely file its federal estate tax return.
Before the deadline for filing and paying the estate tax, the estate requested an extension of time to file the return and pay the tax due and included a partial payment of the estate tax. Eight days after the original due date, the estate made a substantial payment, which resulted in an overpayment of actual estate tax due. The estate argued that the late-filing was due to ongoing probate litigation, difficulty in obtaining valuations and appraisals, and medical conditions suffered both by the executor and the estate’s counsel. In an earlier decision, the court concluded that the government’s refusal to abate the late-filing penalty was arbitrary and capricious.
Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal.