IRS Scrutinizing Land Records, Looking to See if 709 Forms Were Filed re Transfers to Family Members
A request for a subpoena to get documents from a California state agency has shed light on a little-known practice of the Internal Revenue Service.
The IRS is conducting sweeping reviews of land-transfer documents in dozens of states to see whether the required Form 709 has been filed concerning gifts of real estate to family members, the Wall Street Journal reports.
Under newly revised federal law, gift tax isn’t owed unless the total value of the land transfers exceeds $5 million (the limit used to be $1 million, and tax still applies to transfers made when the old law applied). But a Form 709 still must be filed concerning any transfer in which the value of the property given to any individual exceeds $13,000.
It appears from the article that the IRS is collecting money from affected taxpayers only when tax was actually owed. However, it is examining hundreds of returns when it finds that Form 709 wasn’t filed, causing a potential headache for taxpayers.
