(1) The tax due under
this section shall be paid to the department by the person required to file not later
than the date the Colorado return is required to be filed under section 39-23.5-107.
(2) If the person required to file has obtained an extension of time for
payment of the federal tax or has elected to pay such tax in installments, such
person may elect to extend the time for payment of the tax due under this article in
accordance with such extension, or to pay such tax in installments, in the same
manner as provided for payment of the federal tax. Such election shall be made by:
(a) Filing with the department at the time such tax is due a true copy of the
application for extension of time for payment or the election to pay the federal tax
in installments with the returns required under section 39-23.5-107; and
(b) In the case of installment payments, an agreement consenting to the
creation of a special lien under subsection (5) of this section filed with the
department on or before the due date for filing the Colorado return, including
extensions of time for filing such return. The department may also grant extensions
for the filing of such an agreement.
(3) Any person making an estimated federal estate tax payment with the
federal application for extension of time for payment shall make an estimated
Colorado estate tax payment to the department not later than the date the
application for extension of time for payment is filed under subsection (2) of this
section. A true copy of the federal extension of time for payment indicating the
action taken by the internal revenue service shall be filed with the department
within thirty days of issuance.
(4) Any person making the election to pay the Colorado estate tax in
installments under subsection (2) of this section may not defer a percentage of
such tax exceeding the percentage of federal tax actually deferred and may not
defer an amount of tax greater than the tax attributable to the interest in the
closely held business subject to such tax. Proof of the federal estate tax
installment payment shall be submitted annually with the Colorado estate tax
installment payment.
(5) (a) As used in this subsection (5):
(I) Deferral period means the period for which the payment of tax under
this article is deferred pursuant to the election to pay such tax in installments
under subsection (2) of this section.
(II) Deferred amount means the amount of tax under this article that is
deferred pursuant to subsection (2) of this section.
(III) Required interest amount means the interest payable to the
department over the first four years that taxes are deferred pursuant to subsection
(2) of this section.
(IV) Section 6166 lien property means interests in real and other property
to the extent that such interests can be expected to survive the deferral period and
are designated in the agreement required by paragraph (b) of subsection (2) of this
section consenting to the creation of a special lien under this subsection (5).
(b) In the case of installment payments, the deferred amount, plus any
interest, penalties, and costs attributable to such deferred amount, shall be a
special lien in favor of the state on the section 6166 lien property. Except as
otherwise provided in this subsection (5) and subsection (2) of this section, such
special lien shall be subject to the same conditions, limitations, definitions, terms,
and other provisions of the internal revenue code as the special lien in favor of the
United States under section 6324A of such code for federal estate tax deferred
under section 6166 of such code. For the purpose of applying the provisions of such
code to the special lien under this subsection (5), the terms defined in paragraph (a)
of this subsection (5) shall have the meanings given them in such paragraph, and
the term secretary shall refer to the department.
(c) (I) As used in this paragraph (c), value shall have the same meaning as it
has when it is used in section 6324A (b) of the internal revenue code.
(II) The value required as section 6166 lien property shall be the deferred
amount and the required interest amount. For this purpose, the deferred amount
and the required interest amount shall be determined as of the date prescribed for
the payment of the tax imposed by this article, and the value required as section
6166 lien property shall be determined by taking into account any encumbrances
including any federal tax liens. Only property subject to the jurisdiction of the
courts of this state shall be recognized in determining the value of section 6166 lien
property required by this subsection (5).
(d) Except as otherwise provided in this subsection (5), the agreement
referred to in this subsection (5) shall meet the requirements of the agreement
referred to in section 6324A of the internal revenue code. The personal
representative shall be named as agent in the agreement consenting to the special
lien unless another person is named as the agent in a similar agreement filed with
and accepted by the federal tax authorities. In the case that such other person is
named in both such agreements, the department shall deal with such other person
in matters relating to the installment payments and the special lien.
(e) The special lien shall arise when the department files notice thereof in
accordance with the applicable provisions of the internal revenue code and shall
continue until the deferred amount, plus any interest, penalties, and costs
attributable to the deferred amount, is satisfied or such lien is released. The
department may release such lien in whole or in part.
(f) (I) In the event of any default in the payment of the tax due under this
article or any other act or failure to act permitting the acceleration of the payment
of installments, the executive director of the department, through the attorney
general, may bring and prosecute an action in the name of the state as plaintiff for
the purpose of enforcing such lien against all or any of the property subject thereto
in all cases where any tax has become a lien upon any property under the provisions
of this article. In any such action the owner of any property, or of any interest in the
property, against which the lien of any such tax is sought to be enforced, and any
predecessor in interest of any such owner whose title or interest was deraigned
through any such decedent by will or succession or by decree of distribution of the
estate of such decedent or any lien or encumbrance subsequent to the lien of such
tax may be made a party defendant.
(II) Actions may be brought against the state by any interested person for
the purpose of quieting the title to any property against the lien or claim of lien of
any taxes under this article or for the purpose of having it determined that any
property is not subject to any lien for taxes, nor chargeable with any tax under this
article. An action shall not be maintained where any proceedings are pending in any
court of this state wherein the taxability of such transfer and the liability therefor,
and the amount thereof, may be determined. All parties interested in said transfer
and in the taxability thereof shall be made parties thereto, and any interested
person who refuses to join as plaintiff therein may be a defendant. Summonses for
the state in such action shall be served upon the attorney general. Should the court
determine that the property described in the complaint is subject to the lien of said
tax and that such property has been transferred within the meaning of this article,
the court shall award affirmative relief to the state, and judgment shall be rendered
therein in favor of the state ascertaining and determining the amount of such tax,
the person liable, and the property chargeable or subject to the lien.
(6) The personal representative shall file notice with the department of any
default in the payment of amounts or other act or failure to act with respect to the
payment of the corresponding amounts of federal tax or with respect to any bonds
or special liens thereon which could or do result in the termination of the extension
or deferral of the payment of the federal tax under the internal revenue code. Such
notice shall specify the name and account number of the estate and the nature and
circumstances of such default, act, or failure to act and shall be filed within ten
days of such default, act, or failure to act. The department may accelerate the
payment of tax, and interest and penalties thereon, extended or deferred under
subsection (2) of this section when:
(a) Any default, other act, or failure to act with respect to the payment of the
corresponding amounts of federal tax results in the termination of the extension or
of the deferral of the payment of such federal tax; or
(b) Any similar default, act, or failure to act occurs with respect to the
payment of the tax due under this article, including any failure to timely file the
notice required by this subsection (6) or, in the case of installment payments, with
respect to the special lien under subsection (5) of this section, including any failure
to add property as required and within the time allowed under the applicable
internal revenue code provisions.