In our Estate Tax Counsel’s 32 year career as a senior attorney at IRS International Estate Tax, perhaps the greatest bone of contention, certainly the hardest fought issue, was over domicile, whether to file a Form 706 or a Form 706 NA. The stakes in terms of tax dollars often was in the millions of dollars. The estate of a US citizen or domiciliary is subject to FET on a world-wide basis while nonresident aliens estates are subject to tax on assets with a “situs” in the US pursuant to section 2104 of the IRC.
There is no dispute about the fact that if a decedent is a US citizen dying with an estate of over $5.4 million, a 706 needs to be filed. What about US residents? If the resident is not a citizen, it may well raise the issue of which tax return is correct. Most attorneys and accountants deal with income tax, not estate tax. There is a sharp dichotomy between the Read more