@macuser_22 wrote:
You will not find any reference to the 709 or 709 filing requirements in the tax code because the 709 (like other forms) are an IRS invention used to interrupt and apply the actual code.....
The steps for the computation of the rate of tax are basically set forth in the Regs.
See Treas. Reg. §25.2502-1
If you read the Reg to which I referred in an earlier post, it is clear that a return is required to be filed even if there is no tax due as a result of the unified credit under Section 2505 (that is specifically stated in the Reg). The current $15,000 annual exclusion is simply a threshold beyond which a return is required to be filed; it is not the threshold for which tax is due if exceeded (whether or not a return is filed).
You are making an attempt (in my opinion, a futile one) to twist the language of the Code and Regs into a result you believe should obtain.
Some law professors have an issue with the Code not providing for a penalty in this instance, as well:
See https://scholarship.law.duke.edu/cgi/viewcontent.cgi?article=5899&context=faculty_scholarship
While taxable gifts of less than the applicable exclusion amount must be reported on a gift tax return, taxpayers who fail to file may nevertheless not face a penalty, Why? The code applies failure-to-file penalties only when tax is actually due.
