December 27, 2011
IRS looking into property transfer and gift tax filing issue
Every person is allowed to gift up to $5 million in his or her lifetime, exempt from gift taxes. But within a year, each person is also allowed to gift up to $13,000 without that counting towards the lifetime exemption. However, in order to keep track of the amount gifted for each individual, the IRS relies on tax forms that are filed each year.
Most of the states have already provided taxpayer information to the IRS regarding the missing property transfer tax forms. However the IRS is waiting for the names of taxpayers from one more state.
Already, the IRS has found that more than 650 taxpayers should have filed the gift tax return, Form 709, but did not. While most did not gift enough to warrant extra tax, twenty individuals had already exceeded the exempted amount.
Though failure to file an appropriate tax form does not necessarily mean additional taxes, it could lead to a confusing situation for the taxpayer. Whether it is a complicated filing form or an IRS tax dispute, it can help to speak with a tax lawyer. This can help you reach a resolution if you find yourself in the middle of a complex tax-related issue.
Source: Forbes, “Federal Judge Green Lights IRS Search For California Gift Tax Cheats,” Janet Novack, Dec. 18, 2011