William Byrnes' Tax, Wealth, and Risk Intelligence

A recent IRS Chief Counsel Advice addressed the importance of making adequate disclosures to the IRS when filing a gift tax return, demonstrating the dangers of a tight lip. There, a taxpayer failed to disclose the method and valuation discounts used to value gifted stock.  As a result, the taxpayer was unable to seek the protection from gift tax changes based upon the three year statute of limitations.

The statute of limitations for the IRS to question an item on a gift tax return is essentially unlimited if a gift is not “adequately disclosed” on the return, so taxes—and fees and interest—can be imposed on the inadequately disclosed gift any time after the return is filed.

For the complete analysis of this development regarding the disclosures required on a gift tax return by our Experts Robert Bloink and William Byrnes, please read the article via your AdvisorFX subscription at Gift Tax Return Disclosures—Adequate or Else?

For in-depth analysis of this topic, see Advisor’s Main Library Section 7. Gift Taxes D—Valuation For Gift Tax Purposes and from a tax perspective see Tax Facts Q 1534 What are the requirements for filing the gift tax return and paying the tax?

After reading the analysis, we invite your questions and comments by posting them below, or by calling the Panel of Experts.