A new IRS compliance initiative responds to widespread failure to file gift tax returns.

1. Gift Tax Return Gotcha
A new IRS gift tax compliance initiative responds to suspicions of widespread failure to file
gift tax returns.
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LAW OFFICE OF DAVID PARKER BLOG
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2.  This year is a big year for the IRS. Faced with federal revenue
shortfalls and soaring budget deficits, the service is leaving no
stone unturned in its efforts to enforce tax law compliance. One
of its biggest projects is a large-scale program of audits aimed at
gift taxes on real estate transfers.
 There is plenty of room for gleaning tax revenue here.
According to the IRS, between 60% and 90% of taxpayers who
have engaged in activity requiring them to file a gift tax return
fail to do so. This is not a petty problem, and the potential
revenue being lost is not trivial. The problem in the past has
been catching those evading gift taxes in the act.
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LAW OFFICE OF DAVID PARKER BLOG
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3.  Land records maintained at the state and local level give the IRS
the tool it needs to detect taxable gifts of real estate. These
records allow the IRS to track transfers of land ownership that
don’t show up in gift tax returns. When a home is transferred
between family members, for example, the record of the transfer
will appear in the state or county records, which the IRS can use
to determine whether a gift tax should be paid.
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LAW OFFICE OF DAVID PARKER BLOG
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4.  The lesson for those concerned with NY estate planning and
New York asset protection is to be diligent and aware of what
your obligations are, and the tools the IRS has at its disposal to
enforce those obligations. There are many ways to transfer
wealth, some of which avoid either gift or estate taxes, but it’s
important to use the right tools and not be unaware of what can
go wrong.
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LAW OFFICE OF DAVID PARKER BLOG
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5.  Of course, under our federal system of government, the IRS
cannot obtain these records on its own authority. It requires the
cooperation of the states, and at least one state, California, has
shown resistance to cooperating with the federal government on
this, according to a recent article in Forbes. It will be interesting
to watch as this latest state-federal tussle works its way through
the courts.
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LAW OFFICE OF DAVID PARKER BLOG
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6. Law Office of David Parker
Estate Planning and Elder Law
 www.parkertrustlaw.com