When it comes to estate planning and wealth transfer, understanding gift tax is crucial. A key question many people ask is “How Much Can You Gift Tax Free?” The answer to this question is important for anyone looking to provide financial gifts during their lifetime while minimizing tax implications. To effectively manage your gifting strategy and ensure compliance with IRS regulations, accessing your gift tax return history can be essential. The IRS provides a method to obtain a transcript of your gift tax returns, which can be invaluable for tax planning and legal purposes. This article will guide you on how to request a gift tax return transcript from the IRS, ensuring you have the necessary documentation for your financial records.
To obtain a transcript of your gift tax return, you can use Form 4506-T, Request for Transcript of Tax Return. This form, when properly completed and submitted with the required substantiation, allows the IRS to provide you with an account transcript. You can send your request via fax or mail using Form 4506-T. Upon receiving your request, the IRS will verify the information, matching current taxpayer and representative records with the details on Form 4506-T. If everything is in order, a hardcopy transcript will be mailed to your address of record. It’s important to note that the IRS does not charge any fees for this service. However, incomplete or unsubstantiated requests will be rejected, and you will receive a notice informing you of the rejection.
You can download Form 4506-T and its instructions in PDF format from the IRS website. While Form 4506-T serves multiple purposes, it’s vital to pay close attention when completing it specifically for a gift tax inquiry. Follow the printed instructions carefully, with particular emphasis on the following lines:
Lines 1a and 1b: Enter the Donor’s information here, including their Social Security Number (SSN). This is crucial for the IRS to correctly identify the taxpayer whose transcript is being requested.
Lines 2a and 2b: These lines should be left blank when you are requesting a gift tax transcript. They are not applicable for this type of request.
Line 3: Provide the Donor’s current address if they are living. If the donor is deceased, enter the estate representative’s name, title, and address. It is critical that the address you provide matches the official IRS record for the taxpayer. Discrepancies in address information can lead to delays or rejection of your request.
Line 4: Leave this line blank. It is not relevant to requests for gift tax transcripts.
Line 6: In this section, you must specify the type of tax return transcript you are requesting. For gift tax returns, enter “Form 709.” Form 709 is the U.S. Gift (and Generation-Skipping Transfer) Tax Return form, which is essential for gift tax transcript requests.
Line 6 a-c: For gift tax transcript requests, the ONLY option you should select is 6b, “Gift Tax.” Do not make any other selections in items 6 through 8 when requesting a gift tax transcript. Selecting incorrect options will likely result in your request being rejected.
Line 9: Enter the relevant tax period for which you are requesting the transcript. This should be in MMDDYYYY format. If you are unsure of the exact tax period, you may need to use the written request method described later in this article.
Line for Attestation Clause: Before submitting Form 4506-T, the requester must read and agree to the attestation clause printed on the form. You must check this box to allow the IRS to process your Form 4506-T. Failure to check this box will result in the rejection of your request.
Signature/Title Requirements: The person making the request must be authorized to receive the taxpayer’s information. If the taxpayer listed on Line 1 is also the requester, no additional documentation is needed. However, if the requester is someone other than the taxpayer named on Line 1, the “Title” portion of the signature section must be completed and substantiated with appropriate documentation. This is particularly important when someone is requesting the transcript on behalf of an estate or under a power of attorney.
Documentation is Key: In every case where someone other than the taxpayer is requesting the information, proper authentication is required by the IRS. The necessary documentation varies depending on the requester’s relationship to the taxpayer:
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Personal Representative/Executor/Executrix: If you are signing as a Personal Representative, Executor, or Executrix of the donor’s estate, you must provide Letters Testamentary, Letters of General Administration, or a similar court-issued document with your request. In the “Title” section, enter either “Personal Representative,” “Executor,” or “Executrix.”
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Surviving Spouse (No Probate): If there is no probate and you are the surviving spouse requesting the transcript, you need to include a statement confirming that no probate will be commenced. Additionally, a copy of your marriage certificate or a comparable document is required. Enter “Spouse” in the “Title” section.
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Trustee (No Probate): If the estate is managed under a Trustee without probate, you must submit a statement indicating that no probate will be initiated. You also need to provide a Certificate of Trust or a complete copy of the Trust Instrument. In the “Title” section, enter “Trustee of the _______ Trust,” filling in the name of the trust.
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Trust Officer: If a Trust Officer is signing the request, the Bank or Trust Company must verify their authorization to receive taxpayer information. This includes identifying the specific Trust Officer. Enter “Trust Officer” in the “Title” section.
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Tax Professional (Power of Attorney): If a tax professional is submitting the request, you must provide a copy of the initial Form 2848, Power of Attorney and Declaration of Representative, that was originally submitted to the IRS for the same taxpayer and tax year. A new Power of Attorney is insufficient; the Power of Attorney must already be on record with the IRS’s Centralized Authorization File (CAF) system before you send the transcript request. For more details, refer to the section “A Note about Form 2848, Power of Attorney” below. Enter “Power of Attorney” in the “Title” section.
Important Tip: The IRS will not accept altered forms. This includes any forms with white-out, pen and ink changes, or type-overs. Ensure your form is completed cleanly and accurately to avoid rejection.
The instructions for Form 4506-T include a chart detailing where to mail or fax your request based on the state where the taxpayer was domiciled. You will need to send your request to the appropriate RAIVS Team in either Ogden, UT, or Cincinnati, OH, as specified in the instructions.
Written Requests: An Alternative Method
In situations where you don’t have a record of the tax year(s) for which gift tax returns were filed, you can send a written request to the IRS to obtain a gift tax transcript. This method is particularly useful when you need to determine all gift tax returns filed by a taxpayer. Your written request must explicitly state that you are requesting a determination of “All Gift Tax Returns Filed” for the taxpayer. Use the same fax numbers or mailing addresses provided in the Form 4506-T Instructions for submitting written requests. Similar to Form 4506-T requests, written requests also require proper substantiation of the requester’s authority, as outlined above. Unsubstantiated written requests will also be rejected.
A Note about Form 2848, Power of Attorney
Submitting incomplete, duplicate, or unsubstantiated Form 2848s is a common reason for rejection of information requests. To minimize the chances of your Form 4506-T request being rejected when using a Power of Attorney, keep these points in mind:
- File only one official Form 2848 per taxpayer, following the most current instructions. Ensure consistent spelling and address for the taxpayer on all correspondence.
- Send one complete original Form 2848 with substantiation to the CAF Unit at the address indicated in the Form 2848 instructions. This is the only way to officially record the Power of Attorney with the IRS.
- For subsequent correspondence, including transcript requests, provide a copy of the official Form 2848. Do not alter it, do not provide an original signature, and clearly label it as “Copy.” The IRS will electronically verify the filed Power of Attorney based on the data in the CAF system.
- Do not submit a Form 2848 with correspondence if it has not been previously sent to the CAF Unit for processing. The IRS verifies signature dates and other details against the official Form 2848 on file.
- To update a tax professional’s address or phone number on the CAF system, do not file a new Form 2848. Instead, send written notification with the updated information and the representative’s signature to the location where the original Form 2848 was filed.
- The CAF system is updated only with documents received directly at the CAF Unit.
- While optional, on Form 2848, it can be beneficial to check “Other acts authorized” at Line 5a and write in “Request and Receive IRS Transcripts.” This explicitly authorizes the representative to request transcripts on behalf of the taxpayer.
By following these guidelines, you can effectively request and obtain your gift tax return transcript from the IRS, ensuring you have the necessary information to understand your gift tax history and manage your financial planning effectively in relation to how much can you gift tax free under current tax laws. This information is invaluable for both individual taxpayers and their financial advisors in navigating the complexities of gift tax regulations.
