The IRS has released its Statistics of Income (SOI) Bulletin for the fall of 2009.  While this Bulletin may not have great appeal to the average consumer, there are a couple of interesting facts regarding the impact of recent estate tax law changes.

First, the Bulletin shows that the total number of estate tax returns filed between 2001 and 2007 fell significantly - from 108,071 in 2001 to just 38,031 in 2007.  This drop in the number of estate tax returns filed is attributed primarily to the increases in the estate tax exemption occurring during those years.  For example, in 2001, the estate tax exemption was $60,000.  By 2007, the exemption grew to $2 million.  Although the Bulletin does not cover years after 2007, we can anticipate that the number of estate tax returns filed in 2008 and 2009 will continue to decline significantly simply because the exemption has continued to increase.  For 2009, the exemption amount is $3.5 million.

These statistics support the intended goal of Congress in enacting the Economic Growth and Tax Relief Reconciliation Act (EGTRRA) of 2001.  In enacting EGTRRA, it was widely anticipated that less than one percent (1%) of the population would be subject to the estate tax.  It appears that the passage of that legislation has had the intended effect.

Second, while there has been a significant reduction in the number of estate tax returns being filed between 2001 and 2007, the number of returns filed for wealthy decedents - those with estates in excess of $3.5 million - increased significantly, from 9,440 in 2001 to 14,281 in 2007.  It is interesting to note, too, that the greatest percentage of increase occurred between 2005 and 2007 - 33.7%.

What this Bulletin does not reveal, is the overall impact on the amount of revenue generated by the estate tax over this period.  While the fewer returns being filed would suggest that the revenue would be decreased proportionately, the increase in the size of wealthy estates may be sufficient to offset any revenue loss from fewer returns being filed.

While these statistics may put many people to sleep, they will certainly constitute fuel for the upcoming debate on the future of the federal estate tax.   If nothing else, these statistics should provide compelling evidence that the current exemption of $3.5 million keeps 99% of us out of the estate tax arena, while insuring that current revenue streams are maintained.

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