“The IRS’s overhaul of Form 706 introduces structural, procedural, and administrative changes that estate planners can’t afford to overlook. In this newsletter, long-time LISI teammate Paul Hood breaks down the new form, its decoupled schedules, and revised instructions, highlighting ten key developments that change how Form 706 is prepared, filed, amended, and finalized. This update provides a clear roadmap for navigating the new compliance landscape.”

Paul Hood provides commentary on the redesigned Form 706, including key changes to the form, schedules, and filing procedures. Members interested in additional detail on the new Form 706 may view Paul’s most recent LISI webinar using this link.

A native of Louisiana (and a double LSU Tiger), Paul Hood obtained his undergraduate and law degrees from Louisiana State University and an LL.M. in taxation from Georgetown University Law Center before settling down to practice tax and estate planning law in the New Orleans area. Paul has taught at the University of New Orleans, Northeastern University, The University of Toledo College of Law and Ohio Northern University Pettit College of Law. Paul has authored or co-authored nine books, including his most recent book, Yours, Mine & Ours: Estate Planning for People in Blended or Stepfamilies and hundreds of professional articles on estate and tax planning and business valuation. Paul’s website is www.paulhoodservices.com and his e-mail address is paul@paulhoodservices.com

Here is his commentary:

EXECUTIVE SUMMARY:

The IRS’s overhaul of Form 706 introduces structural, procedural, and administrative changes that estate planners can’t afford to overlook. This newsletter breaks down the new form, its decoupled schedules, and revised instructions, highlighting ten key developments that change how Form 706 is prepared, filed, amended, and finalized. This update provides a clear roadmap for navigating the new compliance landscape.

COMMENT:

Here are ten things you should know about the IRS’s updated version of Form 706:

1. Prior to the August 2025 version of Form 706, there was no separate form for an amended Form 706. Formerly, one simply prepared a regular Form 706 marked “supplemental information” with an attachment explaining changes. Now, Part I, Line 13 has a box to check for a “supplemental return.”

2. The redesign of the August 2025 version of Form 706 and its now separated (and separately downloadable) schedules was to modernize tax administration and accommodate significant regulatory shifts. By separating all schedules into individual, downloadable documents, the IRS can update specific schedules independently without having to revise the entire old 56-page return package that included the Form 706 and all of the schedules.

3. The IRS believes that revised Form 706 (August 2025) aligns with its broader goals to transition toward electronic payments and direct deposits for refunds (now enabled via new fields in Part II). The August 2025 version of Form 706 now allows for direct deposit for any refunds as well as to pay electronically for any estate tax payments. Part II, lines 23b, 23c, and 23d added direct deposit fields. If there is an overpayment on Part II, line 23a, preparers can enter the appropriate  direct deposit information on Part II, lines 23b, 23c, and 23d. See Part II, Line 23—Overpayment, for further information.

4. The IRS also removed the built-in section in former Part 2 of the August 2019 version of Form 706 (now Part II of the August 2025 version of Form 706) for a signature line for a taxpayer representative appointment, who now must sign and file Form 2848. Representative’s signature line deleted from new version of Form 706. The August 2025 version of Form 706 still requires the signatures of both the executor and, if applicable, the paid preparer on Page 1 of now Part II. However, the August 2025 version of Form 706 removed the signature of any designated taxpayer representative of the personal representative of the decedent’s estate, e.g., executor, who is authorized to communicate with the IRS on the executor’s behalf), and the latest revision of instructions for Form 706 (Sept. 2025) now clearly provide that a representative of the executor must now separately complete Form 2848 and submit it in accordance with that form’s instructions.

5. The August 2025 revision of Form 706 contains Parts I – VI, a change from using traditional Arabic numbers 1-6, to Roman numbers I-VI), several of which have been reformatted along the way. In my opinion, this was a great change, because the lines in Form 706 also were numbered using Arabic numerals, which occasionally created confusion for some.

6. Prior versions of Form 706 included all of the schedules in the Form 706 package (56 pages with the Schedules to the August 2019 version of Form 706). In the August 2025 version of Form 706, the accompanying schedules were decoupled and must now each be downloaded separately from the IRS website. If a Form 706 preparer doesn’t use software for preparing the return itself (and one should strongly consider using a commercially available preparation software package), one simply must check the above link to the IRS website each and every time to make sure that one is using not only the most current version of Form 706, but  the right version of the accompanying schedules, (which the IRS can now modify independently of Form 706) which puts a premium on the importance of knowing which schedules need to be prepared. This permits the IRS to amend either Form 706 or one or more schedules without having to issue a whole new package.

7. The estate tax closing letter fee has been reduced from $67 to $56 for requests received on or after May 21, 2025. The devil’s in the details/fine print. The September 2025 version of the instructions to the August 2025 version of Form 706 provide: An estate tax closing letter (ETCL) will not be issued unless a request is made via Pay.gov.

8. Instead of an ETCL, the executor of the estate may request an account transcript, which reflects transactions, including the acceptance of Form 706 or the completion of an examination. Account transcripts are available online to registered tax professionals using the Transcript Delivery System (TDS) or to authorized representatives making requests using Form 4506-T, Request for Transcript of Tax Return. Go to Transcripts in Lieu of Estate Tax Closing Letters for specific instructions to request online transcripts using the TDS or hardcopy transcripts using Form 4506-T.

9. From the September 2025 instructions to the August 2025 version of Form 706:

Where To File Form 706 at the following address.

Department of the Treasury
Internal Revenue Service
Kansas City, MO 64999

If you’re using a private delivery service (PDS), file at this address.

Internal Revenue Submission Processing Center
333 W. Pershing Road
Kansas City, MO 64108

If you’re filing a supplemental Form 706, use the following address.

Internal Revenue Service Center
Attn: E&G, Stop 824G
7940 Kentucky Drive
Florence, KY 41042-2915

If you’re using a PDS for your supplemental Form 706, use this address.

Internal Revenue Service Center
Attn: E&G, Stop 824G
7940 Kentucky Drive
Florence, KY 41042-2915

10. New Schedule W is a uniform continuation schedule for all schedules.

Taken together, the August 2025 revisions to Form 706 represent more than a cosmetic redesign. They signal a clear shift in how the IRS expects estate tax returns to be prepared, filed, and administered going forward. The separation of schedules, the formal recognition of supplemental returns, the move toward electronic payments and refunds, and the tightening of representative authorization rules all point to a more modular, electronically oriented compliance framework.

For practitioners, the practical takeaway is vigilance. Preparing Form 706 now requires closer attention to version control, filing mechanics, and procedural details that were previously embedded—or overlooked—within a single, static return package. Small missteps, such as using an outdated schedule or assuming an estate tax closing letter will be issued automatically, can create unnecessary delays or client confusion.

In short, the new Form 706 rewards process discipline. Advisors who stay current on the evolving forms, instructions, and IRS administrative practices will be better positioned to manage expectations, reduce friction with the IRS, and guide executors through an already complex filing process with greater confidence and efficiency.

HOPE THIS HELPS YOU HELP OTHERS MAKE A POSITIVE DIFFERENCE!

Paul Hood

CITE AS:

LISI Estate Planning Newsletter #3274 (February 13, 2026) at http://www.leimbergservices.com. Copyright ? 2026 L. Paul Hood. Reproduction in Any Form or Forwarding to Any Person Prohibited - Without Express Permission. Our agreement with you does not allow you to use or upload content from LISI into any hardware, software, bot, or external application, including any use(s) for artificial intelligence technologies such as large language models, generative AI, machine learning or AI system. This newsletter is designed to provide accurate and authoritative information regarding the subject matter covered. It is provided with the understanding that LISI is not engaged in rendering legal, accounting, or other professional advice or services. If such advice is required, the services of a competent professional should be sought. Statements of fact or opinion are the responsibility of the authors and do not represent an opinion on the part of the officers or staff of LISI.

CITATIONS:

Form 706 (August 2025), Instructions (September 2025), and the various schedules.