Penalty for Not Filing IRS 709

by Anna Assad ; Updated July 27, 2017

IRS Form 709, United States Gift (and Generation-Skipping) Transfer Tax Return, is filed with a federal tax return if the taxpayer owes gift or GST tax. "Generation-Skipping" applies to gifts to a recipient that is a second-generation or more remote relation to the giver, such as a grandparent to a grandchild.

Function

A taxpayer uses Form 709 to calculate federal taxes due on personal gift or generation-skipping transfers of money, real estate and other assets. Gift taxes also apply if an asset is transferred for less than its true value -- the taxpayer is taxed on the difference -- and on forgiven debt. To avoid penalties, these taxpayers must file Form 709 under IRS rules must do so by the date the federal income tax return is due.

Penalties

A penalty applies if a taxpayer does not file Form 709 and owes taxes. The is subject to penalties for tax evasion if the IRS determines that the act was a willful attempt to avoid the gift tax. Other penalties apply if the taxpayer files late or makes errors. A penalty for intentionally underestimating the value of a gift applies if the value shown on the form is less than 66 percent of the true market value. Interest is charged on the taxes due.

Penalty Amounts

The penalty is one-half of 1 percent of the taxes due on the form, as of 2011. The penalty is charged each month until the taxes are paid, but cannot exceed 25 percent of the original tax due. A penalty of 20 percent is charged on underpayment of gift taxes due to an intentional undervaluation of the gift. Penalties for tax evasion -- failing to file the form to avoid tax -- vary by situation, but cannot exceed $100,000, as of 2011. Criminal sentences for tax evasion cannot exceed five years.

Considerations

The taxpayer can avoid some penalties if he can prove he had an acceptable reason for not filing the form, as determined by the IRS on an individual basis. Penalties are not usually applied if the gift is exempt from the federal tax, and the first $13,000 of gift transfer to any person is excluded from gift tax each year, as of 2011.

A taxpayer can extend the time to file Form 709 by filing Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, to get an extension on his income tax return. The extension applies to Form 709 as well, per the IRS. Form 8892 is used to request an extension for Form 709 only if the taxpayer is filing his income tax return on time. Penalties are charged for overdue tax even if an extension is granted.

References

About the Author

Anna Assad began writing professionally in 1999 and has published several legal articles for various websites. She has an extensive real estate and criminal legal background. She also tutored in English for nearly eight years, attended Buffalo State College for paralegal studies and accounting, and minored in English literature, receiving a Bachelor of Arts.

bibliography-icon | raiffeisen-cards.ru icon for annotation tool Cite this Article

Related pages


qualified 501 c 3 organizationcompanies that report to credit bureauscan you deduct home improvements on your taxeswhat is ytm in bondshow long does court take for a speeding ticketwhat was the cause of the 1929 stock market crashschedule k-1 instructions 1065veracity ethical principlewho is grantor and granteeindustry averages financial ratioswhat is the inheritance tax in floridarite aid pharmacy intern applicationwhat is a t4 slip canadadifference between dividend and capital gainhow credit card companies detect fraud700 credit score mortgage ratecalculate default risk premiumveracity in healthcarecan fha loans be refinancedscholarships for children of incarcerated parentsdea lookupsocial security printoutkidney foundation scholarshipsmeaning of eobauto loan rates for 650 credit scorecan you claim homestead exemption on a rental propertycan sallie mae loans be forgivenlouisiana statute of limitations on debttax form 83961040 schedule k 1tax basis of inherited propertyhow much does a grave headstone costhow to calculate your agi from your w2ca controller unclaimed moneyhow much is plasma donation paidself directed brokerage accountsoasdi ratesbank of america hello kitty credit cardcancelling a car insurance claimassumable mortgage canadawhat is the difference between contributory and non contributory pensionwhere is income tax on w2craigslist free giveawaysirish government bondswww mycompass gov garetractable sharesusing someone else's credit card without permissionhow to calculate dividends from retained earningsk-1 forms for trust & estate beneficiariespell grant refundsnetspend reload onlineis a swift code the same as a routing numbergaap fixed assetsmilitary school for troubled teensunclehenrys mainepromissory note for paymentcurrent dow jones divisortexas wic guidelinespenalty for false tax returnwho is the grantee and who is the grantorfreddie mac first look initiativea proportional taxhow to activate vanilla mastercard gift cardmedicaid pregnancy scjoint ownership vs tenants in commonguaranteed income contractis spouse responsible for credit card debtdmv fee calculator cachild support payment in texasfreddiemac homestepsvariable annuities wikiletter from trustee to buy cartricare id card replacementhow often are condo fees paid

Related pages


qualified 501 c 3 organizationcompanies that report to credit bureauscan you deduct home improvements on your taxeswhat is ytm in bondshow long does court take for a speeding ticketwhat was the cause of the 1929 stock market crashschedule k-1 instructions 1065veracity ethical principlewho is grantor and granteeindustry averages financial ratioswhat is the inheritance tax in floridarite aid pharmacy intern applicationwhat is a t4 slip canadadifference between dividend and capital gainhow credit card companies detect fraud700 credit score mortgage ratecalculate default risk premiumveracity in healthcarecan fha loans be refinancedscholarships for children of incarcerated parentsdea lookupsocial security printoutkidney foundation scholarshipsmeaning of eobauto loan rates for 650 credit scorecan you claim homestead exemption on a rental propertycan sallie mae loans be forgivenlouisiana statute of limitations on debttax form 83961040 schedule k 1tax basis of inherited propertyhow much does a grave headstone costhow to calculate your agi from your w2ca controller unclaimed moneyhow much is plasma donation paidself directed brokerage accountsoasdi ratesbank of america hello kitty credit cardcancelling a car insurance claimassumable mortgage canadawhat is the difference between contributory and non contributory pensionwhere is income tax on w2craigslist free giveawaysirish government bondswww mycompass gov garetractable sharesusing someone else's credit card without permissionhow to calculate dividends from retained earningsk-1 forms for trust & estate beneficiariespell grant refundsnetspend reload onlineis a swift code the same as a routing numbergaap fixed assetsmilitary school for troubled teensunclehenrys mainepromissory note for paymentcurrent dow jones divisortexas wic guidelinespenalty for false tax returnwho is the grantee and who is the grantorfreddie mac first look initiativea proportional taxhow to activate vanilla mastercard gift cardmedicaid pregnancy scjoint ownership vs tenants in commonguaranteed income contractis spouse responsible for credit card debtdmv fee calculator cachild support payment in texasfreddiemac homestepsvariable annuities wikiletter from trustee to buy cartricare id card replacementhow often are condo fees paid
"].join(""));l.close()}catch(m){b.src=a+'d.write("'+loaderHtml().replace(/"/g,String.fromCharCode(92)+'"')+'");d.close();'}b.contentWindow.config=k;b.contentWindow.SCRIPT_ID=g},0)}}}(); window.usabilla.load("w.usabilla.com", "4a73c8c43a12"); /*]]>{/literal}*/