Improvements Are Needed in the Estate and Gift Tax Return Examination Process

The Director Examination, Small Business/Self-Employed Division, should ensure that Estate and Gift Tax Program managers complete the Manager's Quality Checklist for Closing Cases to verify that all applicable documentation is included in the IMS case file and that the IMS case file does not include unrelated taxpayers' documents. If documentation is not included in the IMS, the manager should verify that the missing documentation is included in the hard copy case file.

The Director Examination, Small Business/Self-Employed Division, should ensure that managers verify that key documents are created and included in the IMS case file by the required Internal Revenue Manual (IRM) time frames.

The Director Examination, Small Business/Self-Employed, should consider developing guidance on the circumstances in which it is advisable to propose and issue notices of deficiency in estate and gift tax examinations that contain alternative positions.