Just in time for Valentines day we find out that the IRS is working on a major compliance initiative to sniff out tax cheats. The IRS extimates that between 60 to 90% of taxpayers who transfer real estate for little or no consideration to family members fail to file Form 709 to report the gift. So far more than 500 taxpayers have been audited, or are now under examination, and lots more are in the pipeline. The Service is serious about this. When the California Board of Equalization refused to voluntarily disclose the data, the IRS went to court to force it to comply. Even if a gift tax isn't due on the transfer, a return still has to be filed with the IRS If the amount of the gift exceeds the gift tax annual exclusion (currently $13K). According to our sources the IRS is currently checking transfer records from 15 states: Conn., Fla., Hawaii, Neb., N. H., N. J., NY, N. C., Ohio, Pa., Tenn., Texas, Va., Wash., and Wisconsin. Expect more states to provide information as the program expands!
Monday, February 14, 2011
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