IRS Stepping Up Gift Tax Enforcement

According to, the IRS is continuing to search for people who have not filed gift tax returns on property transfers.  From the Forbes article:

Although gift tax audits are historically rare, the IRS has examined hundreds of taxpayers in the last two years whom the IRS suspects made large gifts, yet failed to file the appropriate returns. Borrowing from techniques long employed to identify noncompliant taxpayers in the income tax context, the IRS is using records obtained from third parties—namely, land records maintained in state and county offices—to root out intra-family land transfers for little or no consideration.

I had a similar story on The Dinesen Tax Times earlier this year.  As far as I know, the IRS has not requested records in Iowa, but it has done so in 15 states.

Who could be affected?  Anyone who transferred property to someone for less than “full consideration.”  So for example, if you give a piece of property to your child, you should file a gift tax return if the value of the property is more than $13,000.

Transfers between spouses are not subject to gift tax.  But same-sex married couples should note that they are considered unmarried for federal tax purposes, so the gift tax rules do apply.  This Dinesen Tax Times story has more information about same-sex marriage and gift taxes.