What Is the Penalty for Not Filing a Gift Tax Return?

The gift tax is a tax imposed on the transfer of property by one individual to another, where the transfer is made without receiving anything in return. The Internal Revenue Service (IRS) requires individuals to file a gift tax return if certain conditions are met. Failure to file a gift tax return when required can result in penalties imposed by the IRS.

The penalty for not filing a gift tax return is calculated based on the amount of tax owed. The penalty is typically 5% of the unpaid tax for each month the return is late, up to a maximum of 25%. Additionally, interest accrues on the unpaid tax amount, compounding the penalty over time. If the IRS determines that the failure to file was due to intentional disregard, the penalty can be increased to 75% of the unpaid tax.


1. Who is required to file a gift tax return?
Any individual who gives gifts that exceed the annual exclusion amount (currently $15,000 per recipient) is required to file a gift tax return.

2. What is the deadline for filing a gift tax return?
The gift tax return is due on April 15th of the year following the calendar year in which the gift was made. However, if the individual is granted an extension to file their income tax return, the gift tax return deadline is extended as well.

3. Are there any exceptions to filing a gift tax return?
Yes, there are certain gifts that are not subject to the gift tax and therefore do not require filing a gift tax return. These include gifts made to spouses, political organizations, and qualified charities.

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4. Can penalties be waived for not filing a gift tax return?
In certain cases, the IRS may waive the penalties for not filing a gift tax return if the individual can demonstrate reasonable cause for the failure to file. However, interest on the unpaid tax will still be charged.

5. What happens if I cannot pay the gift tax owed?
If you are unable to pay the gift tax owed, it is still important to file the gift tax return. The IRS offers various payment options, such as installment agreements, to help individuals pay their tax liability over time.

6. What if I discover that I should have filed a gift tax return for previous years?
If you realize that you should have filed a gift tax return for previous years, it is recommended to consult with a tax professional. They can assist you in filing the necessary returns and help determine if any penalties can be mitigated.

7. Can the gift tax return be filed electronically?
Yes, the gift tax return can be filed electronically using the IRS’s e-file system. This allows for faster processing and confirmation of receipt.

8. Are there any gift tax reporting requirements for non-U.S. citizens?
Yes, non-U.S. citizens who are considered residents for tax purposes are subject to the same gift tax rules and reporting requirements as U.S. citizens. However, non-resident aliens are only subject to gift tax on gifts of U.S. situs property.

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