Can a decedent's death tax exemption include his IRAs?

By death tax exemption are you refering to the unified credit on the Form 706?

IRAs are included in a decease's gross estate and then from that amount you would subtract the unified credit, expenses of the estate, martial deduction, and charitable contributions (I'm sure I missed a few in there and those I listed are not in correct order) to come up with any estate taxes.

An IRA doesn't get any different treatment than say stock or a personal residence at the Federal level with the exception it does not get a stepped up or down basis. Your state might have special rules for an IRA.