IRS Missed Gift Tax Deadline After Offshore Entity Disclosure

The IRS missed its deadline to assess taxes on a gift of a life insurance policy to family members, the US Tax Court ruled Monday.

Ronald Schlapfer substantially complied with a Treasury Department regulation on adequate disclosure through a 2013 submission, the court said after considering his gift tax return, a protective filing, an offshore entity statement, plus a separate return on foreign corporations. The IRS assessed more than $8.7 million in taxes and tax additions against Schlapfer in a 2019 deficiency notice.

“Therefore, we conclude that the period of limitations to assess the gift tax expired before the Commissioner ...