Accuracy Penalty

What happens if the IRS finds a mistake on an estate tax return?

When the IRS identifies a significant understatement of estate value, it can assess an accuracy penalty on top of any unpaid taxes owed — this is separate from interest charges that also accrue. These penalties typically apply when the reported value of an estate differs substantially from what the IRS determines to be correct. Estates with total assets well below the federal exemption of $15,000,00026 USC 2001(c), 2010; P.L. 119-21 §70106Verified Jul 13, 2026View source generally do not file an estate tax return at all, which means accuracy penalties are most relevant for larger estates. Thorough asset documentation from the start — including clear records of property, accounts, and ownership structures — is one way families can reduce the risk of valuation disputes down the road.