Iowa Administrative Code › Agency 701 - Revenue Department › Title X - Inheritance Tax › Chapter 900 - Inheritance Tax › Rule 701-900.3 - Audits, Assessments and Refunds

Current through Register Vol. 47, No. 3, July 24, 2024
(1)
Audits.
Upon filing of
				the inheritance tax return, the department must audit and examine it and
				determine the correct tax due. A copy of the federal estate tax return must be
				filed with the inheritance tax return in those estates where federal law
				requires the filing of a federal estate tax return. The department may request
				the submission of wills, trust instruments, contracts of sale, deeds,
				appraisals, and such other information as may reasonably be necessary to
				establish the correct tax due. See Iowa Code sections
				450.66 and
				450.67 and
Tiffany v.
				County Board of Review,
188 N.W.2d 343, 349 (Iowa 1971). For taxpayers
				using an electronic data interchange process or technology also see 701-subrule
				11.4(4). The person or persons liable for the payment of the tax imposed by
				Iowa Code chapter 450 shall keep the records relating to the gross and net
				estate required for federal estate tax purposes under
				26 U.S.C. Section
				6001 of the Internal Revenue Code and federal
				regulation Section 20.6001 -1.
(2)
Assessments for additional
				tax.
The taxpayer must file an inheritance tax return on forms
				prescribed by the director on or before the last day of the ninth month after
				the death of the decedent. When an inheritance tax return is filed, the
				department shall examine it and determine the correct amount of tax. If the
				amount paid is less than the correct amount due, the department must notify the
				taxpayer of the total amount due together with any penalty and interest which
				shall be a sum certain if paid on or before the last day of the month in which
				the notice is postmarked or on or before the last day of the following month if
				the notice is postmarked after the twentieth day of a month and before the last
				day of the following month. For estates with decedents dying on or after July
				1, 1999, the date of the notice and not the postmark date is controlling. If
				the inheritance tax return is not filed within the time prescribed by law,
				taking into consideration any extensions of time, or the return as filed is not
				correct, the department may make an assessment for the tax and any penalty and
				interest due based on the inventories, wills, trust instruments, and other
				information necessary to ascertain the correct tax. For interest and penalty
				rate information, see 701-Chapter 10.
(3)
Refunds.
If the
				examination and audit of the inheritance tax return discloses an overpayment of
				tax, the department will refund the excess to the taxpayer. See 701-Chapter 10
				for the statutory interest rate commencing on or after January 1, 1982. For
				estates of decedents dying prior to January 1, 1988, interest shall be computed
				for a period beginning 60 days from the date of the payment to be refunded. For
				estates of decedents dying on or after January 1, 1988, interest must be
				computed for a period beginning the first day of the second calendar month
				following the date of payment, or the date upon which the return which sets out
				the refunded payment was actually filed, or the date that return was due to be
				filed, whichever date is the latest. For the purposes of computing the period,
				each fraction of a month counts as an entire month. If the taxpayer, after the
				tax has been paid, discovers additional liabilities which, when offset by any
				additional assets results in an overpayment of the tax, the excess payment will
				be refunded to the taxpayer upon filing with the department an amended
				inheritance tax return claiming a refund. No refund for excessive tax paid
				shall be made by the department unless an amended return is filed with the
				department within three years (five years for estates of decedents dying prior
				to July 1, 1984) after the tax payment upon which the claim is made became due,
				or one year after the tax was paid, whichever time is the later-see Iowa Code
				section 450.94(3).
(4)
Supplemental assessments and
				refund adjustments.
The department may, at any time within the period
				prescribed for assessment or refund adjustment, make a supplemental assessment
				or refund adjustment whenever it is ascertained that any assessment or refund
				adjustment is imperfect or incomplete in any respect.
If an assessment or refund adjustment is appealed (protested
				  under rule 701-7.8 (17A)) and is resolved
				  whether by informal proceedings or by adjudication, the department and the
				  taxpayer are precluded from making a supplemental assessment or refund
				  adjustment concerning the same issue involved in such appeal for the same tax
				  period unless there is a showing of mathematical or clerical error or a showing
				  of fraud or misrepresentation.
(5)
Assessments-period of
				limitations.
Effective for estates of decedents dying on or after July
				1, 1984, assessments for additional tax due must be made within the following
				periods of time:
a. Within three years after
				the return is filed for property reported to the department on the return. The
				three-year period of limitation does not begin until the return is filed. The
				time of the decedent's death is not relevant. For purposes of determining the
				period of limitations, the assessment period shall terminate on the same day of
				the month three years later which corresponds to the day and month the return
				was filed. If there is no numerically corresponding day three years after the
				return is filed, or if the expiration date falls on a Saturday, Sunday, or
				legal holiday, the assessment period expires the preceding day in case there is
				no corresponding day, or the next day following which is not a Saturday,
				Sunday, or legal holiday.
b. The
				period of time for making an assessment for additional tax is unlimited if a
				return is not filed with the department.
c. If a return is filed with the department,
				but property which is subject to taxation is omitted from the return, the
				three-year period for making an assessment for additional tax on the omitted
				property does not begin until the omitted property is reported to the
				department on an amended return. The omission of property from the return only
				extends the period of limitations for making an assessment for additional tax
				against the beneficiary, surviving joint tenant, or transferee whose share is
				increased by the omitted property. Other shares of the estate are not affected
				by the extended assessment period due to the omitted property. The inheritance
				tax is a separate succession tax on each share of the estate, not on the estate
				as a whole.
In re Estate of Stone,
132 Iowa 136, 109 N.W. 455
				(1906).