Avoiding Gift and Estate Audit Triggers: Anticipating Audit Issues, IDRs, and Appeals

A live 110-minute CPE webinar with interactive Q&A


Thursday, October 24, 2019

1:00pm-2:50pm EDT, 10:00am-11:50am PDT

Early Registration Discount Deadline, Friday, September 27, 2019

or call 1-800-926-7926

This webinar will guide advisers filing gift and estate returns in understanding how best to prepare for and handle IRS audits of Forms 706 and 709. Our expert will address issues to expect, when appraisals are necessary, dealing with unreported gifts, and the current state of the IRS initiative in this area.

Description

By nature, an estate or gift tax audit is different than an income tax audit. Anticipating these unique issues and knowing how to handle a 706 or 709 audit is critical to avoid additional estate tax liability or a reduction in a taxpayer's unified credit. Moreover, properly prepared gift tax returns set the stage for later estate tax savings on death. Although the total number of IRS audits continues to drop, the likelihood of an estate or gift tax return audit is much higher than other returns, with one in 12 estate returns and one in 130 gift tax returns currently selected for audit by the IRS.

Finding out that an estate is officially closed, and not subject to audit, allows the preparer, executor, and beneficiaries to breathe sighs of relief. There are steps that advisers and executors can take on every gift and estate return to mitigate the chance of audit and better prepare a return with sticky issues for audit. A thorough internal review can avoid many audit triggers. Missing documentation, vague descriptions, and discrepancies between the will and the 706 can be corrected before the return is submitted. Other triggers, valuation, minority and marketability discounts for closely held businesses, thorough reporting of adjusted taxable gifts, and special elections require more consideration before reporting.

At the onset of an audit, the practitioner must respond to the IDR (Information Document Request). IRC Section 7491 allows the shifting of the burden of proof to the IRS for taxpayers meeting its requirements. These requirements include cooperating with the IRS and its IDRs, which can sometimes be impracticable. Often the next consideration is whether to allow an extension of the statute--what do you give up and when is this in the taxpayer's best interest? When the taxpayer and IRS don't agree, the taxpayer can initiate an appeals conference. When is an appeals conference advisable, and what are the odds of coming out ahead in appeals?

Listen as our expert conveys first-hand knowledge of IRS audits of estate and gift tax returns, including issues to expect during 706 and 709 examinations, how to reduce the likelihood of being selected, and how the IRS audit process works.

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Outline

  1. Issues to expect
  2. Avoiding audit triggers
  3. Protecting the burden of proof
  4. Extending the statute
  5. The appeals process
  6. The current state of the IRS initiative

Benefits

The panelist will review these and other key issues:

  • How to lessen the chances of being selected for a gift or estate return audit
  • Selection of appraisers and communication for the most effective valuation reports
  • Complying with the all-important adequate disclosure requirements with gift tax returns
  • What steps can be implemented internally to prepare for 706 and 709 audits
  • When to permit the extension of the statute of limitations with gift tax audits
  • Hot issues that trigger estate and gift tax audits
  • How to best communicate with the IRS

Faculty

Schiller, Keith
Keith Schiller, Esq., MBA

Principal
Schiller Law Group

Mr. Schiller's practice predominantly focuses on estate planning (including business formation and succession...  |  Read More

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