During a recent smog check, after making the proper adjustments, it appears my '87 420SEL would meet all CA emission standard. However, the timingwais measured at 47 degrees BTDC, instead of the spec which is 12 degrees BTDC.
As a result, although the car was running ok, it failed the smog test.
Could the Ignition Control Unit be at fault? Please shed some light into this matter. Thank you!

The only way that timing could get off that far is for flywheel to be incorrectly positioned, or severe electronic ignition module failure. Has the rear main oil seal been replaced recently??

No, the rear main oil seal was not replaced. The only recent activity was a fuel filter replacement.