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Instructions for Form 706-NA (11/2007)Table of Contents Form 706-NA is used to compute estate and generation-skipping transfer (GST) tax liability for nonresident alien decedents. The estate tax is imposed on the transfer of the decedent's taxable estate rather than on the receipt of any part of it. 
Internal Revenue Service
Note. In order to complete this return, you must obtain Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, and its separate instructions. You must attach schedules from Form 706 if you intend to claim a marital deduction, a charitable deduction, a qualified conservation easement exclusion, or a credit for tax on prior transfers, or if you answer “Yes” to question 5, 7, 8, 9a, 9b, or 11 in Part III, General Information. You will need the instructions to Form 706 to explain how to value stocks and bonds. Make sure that you use the version of Form 706 that corresponds to the date of the decedent's death.
The following definitions apply in these instructions.
Nonresident alien decedent.
A nonresident alien decedent is a decedent who is neither domiciled in nor a citizen of the United States at the time of death. For purposes of this form, a citizen of a U.S. possession is not a U.S. citizen.
Long-term United States resident.
A long-term U.S. resident is an alien who is a lawful permanent resident of the U.S. in at least eight of the last fifteen taxable years ending with the taxable year in which U.S. residency is terminated.
Executor. An executor is the personal representative, executor, executrix, administrator, or administratrix of the deceased person's estate. If no executor is appointed, qualified, and acting in the United States, every person in actual or constructive possession of any of the decedent's property must file a return. If more than one person must file, it is preferable that they join in filing one complete return. Otherwise, each must file as complete a return as possible, including a full description of the property and each person's name who holds an interest in it.
U.S. expatriate. Generally, a U.S. expatriate is one who, within ten years before the date of death, lost U.S. citizenship or (in certain cases) ended long-term U.S. residency with the principal purpose of avoiding U.S. taxes. See the instructions for Question 6a and Question 6b on page 2. Also, see effective dates below for more information.
After June 3, 2004. A citizen or long-term resident, who lost U.S. citizenship or residency after June 3, 2004, is subject to the alternative tax regime of section 877 when the individual:
On or after February 6, 1995. Under prior law, citizens or certain long-term residents (as defined in section 877(e)), who lost U.S. citizenship or residency on or after February 6, 1995, are presumed to have the principal purpose of avoiding U.S. taxes, if the decedent's average annual net income tax liability or net worth exceeds certain limits. However, the executor has an opportunity to prove otherwise. See sections 877(a)(1), (2), and (c), before its amendment by P.L. 108-357, for more information.
The executor must file Form 706-NA if the date of death value of the decedent's gross estate located in the United States under Internal Revenue Code situs rules exceeds the filing limit. The filing limit is $60,000 reduced by the sum of:
File Form 706-NA within 9 months after the date of death unless an extension of time to file was granted. Form 706-NA must be filed at: Department of the Treasury The law provides for penalties for both late filing of returns and late payment of tax unless there is reasonable cause for the delay. There are also penalties for willful attempts to evade or defeat payment of tax. The law also provides for penalties for valuation understatements that cause an underpayment of tax. See sections 6662(g) and (h) for more details.
Return preparer. The Small Business and Work Opportunity Tax Act of 2007 (Act) amended section 6694 to extend the application of income tax return preparer penalties to all tax return preparers, including estate tax return preparers. Under the amended provision and transitional relief provided by Notice 2007-54, 2007-24 I.R.B. 12, estate tax return preparers, who prepare any return or claim for refund which reflects an understatement of tax liability due to willful or reckless conduct, are subject to a penalty of $5,000 or 50% of the income from (or income to be derived from), whichever is greater, for the preparation of each such return. See section 6694 and Notice 2007-54 for more details.
Death tax treaties are in effect with the following countries:
If you are reporting any items on this return based on the provisions of a death tax treaty or protocol, you may have to attach a statement to this return disclosing the return position that is treaty based. See Regulations section 301.6114-1 for details.
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