Estate Responsible for Penalties For Decedent's Failure to Report Foreign Trust

The Internal Revenue Service Office of Chief Counsel, in a chief counsel advice memorandum released Feb. 24, said an estate is responsible for Section 6677 penalties for failure to file information returns regarding foreign trusts for tax years ending prior to the decedent's death.

The estate is responsible for “initial” penalties asserted against the decedent where Forms 3250, Annual Return to Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts, and 3250-A, Annual Information Return of Foreign Trust With a U.S. Owner, were not timely filed with respect to a foreign grantor trust established by the decedent, the office said in CCA201208028