The Internal Revenue Service has begun searching recorded real property deeds, many of which are available by internet, in order to check for the filing of gift tax returns on transfers that appear to be gifts to family members.
The IRS is looking for property transfers that were not reported on a gift tax return if the property appears to be deeded to a non-spouse family member. The target period is January 1, 2005 thru December 31, 2010. However, their investigation may also disclose transfers outside of this period.
The good news is that in most cases no gift tax is due with the return, so it is simply a matter of putting the IRS on notice and claiming the applicable tax exclusions and exemptions. There are typically no penalties for filing a late gift tax return, depending on if gift tax is actually due with the return or not. If you have been the grantor or recipient of a family gift, and you believe a gift tax return may need to be filed, please contact us at Berry Talbot Royer.
