Sumner Redstone, CEO of Viacom, Blitzed by IRS’s Push to Enforce Gift Tax Rules on a Gift He Made 41 Years Ago claims UltraTrust.com

UltraTrust.com asserts the IRS’s aggressive gift tax initiative could affect millions of Americans who have similar issues due to poor advice or lack of knowledge of the rules

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IRS is Coming after Sumner Redstone for not Filing his Gift tax form

IRS is Aggressively Coming after Those that did not File their Gift tax form

The federal government is stepping up its collection efforts by going after anyone they can, including a 41 year old transfer of assets

Boston, MA (PRWEB) June 18, 2013

UltraTrust.com, founded by Estate Street Partners, a website for those seeking expert irrevocable trust planning, recently analyzed the IRS’s Tax Court case against billionaire Sumner Redstone, chairman of CBS Corporation and Viacom for allegedly not filing a gift tax return 41 years ago and the IRS now claim he owes $1.1 million in taxes and penalties (1). UltraTrust.com comments on what this may mean for millions of Americans.

Mr. Redstone, according to court documents, filed a petition on April 10 in the U.S. Tax Court responding that the transaction the IRS alludes to was not a gift, but rather an intra-family dispute and “ordinary business transaction.” (1)

The transaction claimed as a gift by the IRS was made in 1972. Mr. Redstone’s case is being appealed [Redstone v. Commissioner of Internal Revenue, Docket No. 008097-13, (2013)].

Though this transaction was made 41 years ago, the statute of limitations is unlimited when no tax is filed for any transaction.

“This is really troubling as it can set a major precedent. I believe many Americans who have made a gift contribution to their irrevocable trust or family members, but have not filed or improperly filed their gift to the IRS may have them come knocking on their door,” claims Rocco Beatrice, an estate planner and irrevocable trust expert and Managing Director of Estate Street Partners.

“Every large gift (currently ones over $14,000) to either another person or an irrevocable trust needs to be reported to the IRS by way of gift tax filing form 709,” continues Mr. Beatrice.

The IRS gift tax filing form 709 is located at the URL http://www.irs.gov/pub/irs-pdf/i709.pdf.

“Last year was a banner year for us consulting around transferring assets to irrevocable trusts,” states Mr. Beatrice.

“I imagine every estate planning lawyer in the country had record years due to the federal government’s last minute estate and gift tax decision. That means possibly thousands of irrevocable trusts were created and funded with gifts.”

Last year, with the federal government’s uncertainty around the gift and estate tax rate due to unknown election results, UltraTrust.com asserts many ran to their local lawyer and set up irrevocable trusts to take advantage of the, then, favorable tax exemptions.

“In an informal poll taken of my prospective clients who called asking questions about their irrevocable trusts, 6 out of 10 didn’t know about the gift tax return filing, because their estate planner or lawyer didn’t tell them,” explains Mr. Beatrice of UltraTrust.com.

UltraTrust.com suggests this could mean millions have not filed a gift tax return and thus, the IRS could impose the back tax, interest, and penalties even decades later if this is the case.

According to court documents, the petition filed by Sumner Redstone states that the IRS’s alleged gift in question are some shares in National Amusements, Inc. that was transferred to Edward’s and Sumner’s children. Edward is Sumner’s late brother.

According to UltraTrust.com, Mr. Redstone may have to spend a significant amount of time and resources fighting this tax case in court. However, most people may not have Mr. Redstone’s resources to contest the IRS’s claims.

UltraTrust.com expects that a lot of those who may struggle to pay are those who put all of their assets into irrevocable trusts in anticipation of qualifying for Medicaid, a popular way to protect assets for children.

A gift to an irrevocable trust is considered a completed gift because the person putting the assets into the trust no longer has ownership over anything in the trust. If the person funding the trust can’t get at the assets, neither can the nursing home thereby qualifying the person for Medicaid and keeping the assets safe for beneficiaries.

“By not filing a gift tax return, it’s a catch-22. If the person manages to get the irrevocable trust to pay the taxes and penalties, then the government can make a case that the grantor has too much control and thus trust assets are not separate. Therefore it isn’t truly irrevocable and the person doesn’t qualify for Medicaid thus the assets should be used to pay nursing home bills,” explains Mr. Beatrice.

“If the trust doesn’t pay, then the person may not be able to get the IRS off their back spending potentially tens of thousands to defend themselves and may be subject to fines or jail.”

“If you don’t want to be in Mr. Redstone’s shoes and you have an existing irrevocable trust, I suggest you call an estate planning tax expert,” urges Mr. Beatrice.

“Even if the IRS hasn’t contacted you, please remember that there is no statute of limitations on a failure to file your taxes.”

As a matter of fact, according to The Kiplinger Tax Letter Volume 87, No. 26, the IRS has been actively trying to identify those who did not file their gift tax returns by collecting data from state property records.

“In this economy, even the federal government is stepping up its collection efforts by going after anyone they can, including a 41 year old transfer of assets,” explains Mr. Beatrice, “It’s time to cross your T’s and dot on all of your I’s.”

To learn how to protect assets save on estate taxes and probate costs visit UltraTrust.com, the irrevocable trust experts. Visit MyUltraTrust.com to set up a DIY irrevocable trust plan.

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About Estate Street Partners (UltraTrust.com):
Assets can be protected from frivolous lawsuits while eliminating your estate taxes and probate, and also ensuring superior Medicaid asset protection for both parents and children with their Premium UltraTrust® Irrevocable Trust. Call today at (888) 938-5872.

Sources:

1- ustaxcourt.gov/UstcDockInq/DocketSheet.aspx?DocketNo=13008097

2 - en.wikipedia.org/wiki/Sumner_Redstone

3 - irs.gov/pub/irs-pdf/i709.pdf

4 - bloomberg.com/news/2013-05-01/billionaire-redstone-challenges-irs-on-tax-for-1972-gift.html

5- ultratrust.com