The IRS has offered (Rev. Proc. 2014-18) estates of decedents dying before 2014 relief for missed "portability" elections.

Estates of decedents with a surviving spouse may elect under Section 2010(c) to permit the surviving spouse to use the decedent's spousal unused exclusion (DSUE) amount. Commonly referred to as the portability election, it allows the surviving spouse to use the deceased spouse's unified credit — effectively doubling the amount of wealth transfers than can be made without paying gift or estate tax. The portability election must be made on an estate tax return filed in a timely manner.

Failure to make the election can, in retrospect, be viewed as harmful to the interests of the surviving spouse's family. Rev. Proc. 2014-18 provides an expedited procedure for obtaining an extension of time to make the portability election. To qualify, the estate must meet the following requirements:

(1) The taxpayer is the executor (see Treas. Reg. Sec. 20.2010-2T(6)) of the estate of a decedent who meets the following criteria:

(a) Has a surviving spouse

(b) Died after Dec. 31, 2010, and on or before Dec. 31, 2013,

(c) Was a citizen or resident of the United States on the date of death

(2) The taxpayer is not required to file an estate tax return under Section 6018(a) (as determined based on the value of the gross estate and adjusted taxable gifts, without regard to Treas. Reg. Sec. 20.2010-2T(a)(1))

(3) The taxpayer did not file an estate tax return within the time prescribed by Treas. Reg. Sec. 20.2010-2T(a)(1) for filing an estate tax return required to elect portability

Relief is available only for estates that were not required to file a return. The time for making the election for estates required to file a return is fixed by the statute, so the IRS does not have the authority to extend the deadline.

The revenue procedure does not apply to estates of decedents dying after 2013. So far, the IRS has been generous in granting relief under the Section 9100 regulations in this area. The portability election is new (available only starting in 2011), and the IRs has been fairly understanding of the fact that taxpayers and their tax professionals may not have been aware of the election or how to properly make it. But the IRS may not continue to be as understanding going forward.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.