Therefore, both returns should be filed in the same envelope. The cover letter should make it abundantly clear that there are two returns. If the returns are taxable, two checks, one for each return, should be attached to the cover letter. Be sure each spouse's social security number is shown on his or her check. The gift tax return for gifts made during the decedent's year of death is due at the same time as the estate tax return.
Executors frequently file that return with the estate tax return.
Unfortunately, the I.R.S. processing clerks will often treat that gift tax return as an exhibit to the estate tax return and will not process it as a separate return. I recommend that the final year gift tax return be filed under separate cover. A copy, clearly marked as a copy, can then be filed with the exhibits to the estate tax return. In the initial processing of estate tax returns, the account is created to reflect the tax assessed and the tax paid. During this process the I.R.S. clerks are pressed for time and do not always read the cover letters or the attachments to the return.