Unreported Gifts of Real Property: Time for a Voluntary Disclosure?
08.01.2011
Tax Notes
Article
The IRS is reviewing state real property tax records to find gratuitous transfers of property to non-spouse family members. It is then comparing those records to gift tax returns to find cases of noncompliance with reporting requirements. The IRS has already examined property tax records in at least 15 states and, as of the end of 2010, it had opened more than 300 taxpayer examinations.
A taxpayer or fiduciary concerned about prior noncompliance should not wait for the IRS to make the first contact. Instead it should make a voluntary disclosure to correct non-compliance regarding unfiled gift tax returns or incorrect gift or estate tax returns arising from a previously unreported gift. The rules and options for voluntary disclosures have been refined in the recent offshore voluntary disclosure programs, the lessons of which would affect voluntary disclosures arising from previously unreported gifts. A timely and complete disclosure can help avoid possible criminal prosecution and may limit penalty exposure for taxpayers and fiduciaries.
Click on the attached pdf to read the full text of the article.
A taxpayer or fiduciary concerned about prior noncompliance should not wait for the IRS to make the first contact. Instead it should make a voluntary disclosure to correct non-compliance regarding unfiled gift tax returns or incorrect gift or estate tax returns arising from a previously unreported gift. The rules and options for voluntary disclosures have been refined in the recent offshore voluntary disclosure programs, the lessons of which would affect voluntary disclosures arising from previously unreported gifts. A timely and complete disclosure can help avoid possible criminal prosecution and may limit penalty exposure for taxpayers and fiduciaries.
Click on the attached pdf to read the full text of the article.
