Gift Tax and GST Tax

By Steffi Gascón Hafen

On March 13, 2020, the President of the United States issued an emergency declaration in response to the ongoing COVID-19 pandemic. The Emergency Declaration instructed the Secretary of the Treasury to provide relief from tax deadlines to Americans adversely affected by the pandemic. The IRS previously extended the deadlines to file income tax returns and pay income tax to July 15, 2020.

While the initial IRS relief did not extend the deadline for the time to file and pay federal gift tax or generation skipping transfer tax, the IRS has since amplified the prior relief. This Legal Alert supersedes the previous Legal Alert on this subject.

Now, any person with a federal gift tax or generation-skipping transfer tax payment due or the requirement to file Form 709 to report such taxes on April 15, 2020 is considered affected by COVID-19 for purposes of relief (an “Affected Taxpayer”). For an Affected Taxpayer, the due date for filing Form 709 to report gift tax or generation-skipping transfer tax and to pay any such taxes due is automatically postponed to July 15, 2020. This relief is automatic with no action by the Affected Taxpayer.

As the world temporarily goes virtual, it is important to work with an estate planning team ready to assist you from the comfort of your home. You may want to consider a check-up call or videoconference with your digitally-equipped estate planner to ensure your current planning objectives are protected.

Guidance in response to the COVID-19 pandemic is constantly being updated. This article is merely intended to introduce recent FTB and IRS accountments, and related planning issues, and is not a substitute for careful tax planning. Those with questions are strongly encouraged to reach out to their tax advisor.