@Anonymous_ wrote:
@macuser_22 wrote:
Agreed, but if *required* to be filed then what is the penalty for not filing it if I am incorrect? There is clearly a penalty for not filing it, but what is it if it does not exist?
If there is no tax due, then probably nothing (but I believe there is a general failure to file penalty somewhere in §§7201-7217).
Again, if you cannot find a specific penalty in the Code or Regs, then it simply does not exist; a penalty cannot merely be assessed because it seems correct to do so or it would otherwise be illogical not to apply a penalty.
Why is there zero tax due? -- only because the $11 million exemption makes it so. How does one get the gift applied to the exemption? - only one way - by filing a 709 form. Agreed, that filing late 709 means that there will be zero tax due, but there is a penalty due based on what the tax would have been had the 709 never been filed. What is due is the *penalty*, not the tax. However, the IRS will accept almost any reasonable explanation why the 709 was not timely filed and forgive the penalty.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
