Statutes of Limitation in Tax Matters Gift Tax Returns

At Castro & Co., we are often asked about the “Statute of Limitations” on tax returns. This article deals more specifically with U.S. Gift Tax Returns on Form 709. The “statute of limitations” on gift tax returns is three years. The term “statute” is a synonym for “law,” so we’re dealing with the law on limitations. The law sets a point when the government is no longer allowed to pursue you for an act that took place. It’s important to note that this is a privilege the government grants, which means there’s no requirement that there be any time limits at all. The government could decide to eliminate all limitations.
Once an act takes places, the statute of limitations “clock” starts to run. In the tax world, the act has to give the IRS reasonable notice of the issue. A failure to file a tax return or filing one with inadequate information is not an affirmative act; thus, neither starts the statute of limitations “clock.” Inadequate information can include how valuation was determined and the method for applying valuation discounts. In other words, playing “hide the ball” from the IRS will not work. You need to openly and blatantly report everything in the return. When that’s done, the statute of limitations “clock” starts to run, and, after three years, the IRS is legally prohibited from examining anything in that return.

We Provide Peace of Mind

For that reason, it is our firm’s practice to provide as much detail as possible; much more than required by law. Our goal is to give our clients peace of mind knowing that, after three years, they have nothing more to be concerned about. Without that, the IRS could come knocking on your door twenty years later with a crippling tax bill. If you are looking for a top-notch Orlando tax attorney, Castro & Co. fits the bill. We offer a broad range of services specializing in international taxation, international estate planning, wealth transfer, estate, gift and GST tax planning. We strive to provide results-driven legal solutions to our clients’ sophisticated international tax planning needs.

Contact our offices today to schedule a consultation.

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