In 2023, just 9,024 federal estate tax returns generated $44.4 billion in IRS revenue. That shows how powerful estate tax can be. In 2026, the federal estate tax exemption rises to $15 million per person. Estate tax vs inheritance tax is not the same. Estate tax is paid by the estate before heirs receive assets. Inheritance tax is paid by beneficiaries after distribution. There is no federal inheritance tax. Five states impose inheritance tax. Several states levy state estate tax with lower thresholds.