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Penalties for what, exactly? 

 

Penalties for failing to file a gift tax return - 709 - would be interest based on the amount of gift tax owed. If none was owed, which is almost always the case, then there should be no interest due or penalties beyond, perhaps, a late filing penalty.

 

Ref https://www.irs.gov/instructions/i709#en_US_2024_publink16784xd0e977

 

The above IRS instructions refer to Section 6651 which you can read here:

 

https://www.irs.gov/instructions/i709#en_US_2024_publink16784xd0e977

 

Even if a late filing fee is assessed, it would tough to figure how it could get "upwards of $10k".