SECTION 2. BACKGROUND

Final regulations (T.D. 9468, 2009–44 I.R.B. 570) under section 2053 of the Code were published in the Federal Register on October 20, 2009 (74 FR 53652) to provide guidance in determining the deductible amount of a claim against a decedent’s estate under section 2053. The final regulations provide, with certain exceptions, that the amount deductible for a section 2053 claim or expense is limited to the amount actually paid in settlement or satisfaction of that claim or expense (subject to any applicable limitations in § 20.2053–1). For amounts that are not paid or otherwise deductible at the time of filing the United States Estate (and Generation-Skipping Transfer) Tax Return (Form 706), § 20.2053–1(d)(5)(i) of the Estate Tax Regulations permits the filing of a protective claim for refund.

Section 20.2053–1(d)(5)(i) provides in part that a protective claim for refund may be filed at any time before the expiration of the period of limitation prescribed in section 6511(a) to preserve the estate’s right to claim a refund in the case of a claim or expense that might not be paid or might not otherwise meet the requirements of deductibility under section 2053 and the corresponding regulations until after the expiration of the period of limitation for filing a claim for refund. Such a claim for refund is referred to herein as a “section 2053 protective claim for refund.” Section 20.2053–1(d)(5)(i) further provides that a protective claim must identify the outstanding claim or expense that would have been deductible under section 2053(a) or (b) if such item already had been paid, and must describe the reasons and contingencies delaying the actual payment of the claim or expense. When the contingencies delaying actual payment are resolved, § 20.2053–1(d)(5)(i) requires the fiduciary acting on behalf of the estate to notify the Service within a reasonable period that the contingency has been resolved and that the amount deductible under § 20.2053–1 has been established. A deduction will be allowed to the extent the claim or expense that was the subject of the protective claim satisfies the requirements for deductibility under § 2053 and the corresponding regulations, subject to any applicable limitations in § 20.2053–1.

Commentators responding to proposed regulations issued under section 2053 of the Code (published in the Federal Reg- ister on April 23, 2007 (72 FR 20080)) requested detailed guidance on protective claim for refund procedures. Section 20.2053–1(d)(5)(i) provides that a protective claim for refund shall be made in accordance with guidance that may be provided from time to time by publication in the Internal Revenue Bulletin (see § 601.601(d)(2)(ii)( b )).