California Judge OKs IRS Request for BOE Search of Property Transfers

10:33 pm Asset Protection, Estate Planning, Tax Planning

IRS logo 2 150x150 California Judge OKs IRS Request for BOE Search of Property TransfersAn Eastern District of California judge has given the IRS permission to serve a “John Doe” summons on the California State Board of Equalization in an effort to track down state taxpayers who transferred property without paying gift tax.

According to a Forbes article, Judge Morrison C. England, Jr. initially turned down the government’s request for the summons last May, saying that the IRS had not proven that it could not reasonably obtain the information from the state’s 58 counties.  The U.S. Department of Justice filed the case again two months ago, and Judge England said in a December ruling that the government had shown that it would not be able to obtain the information from some of the counties, making the BOE “the most reliable and least burdensome option.”

The IRS has targeted intra-family property transfers in several states to uncover taxpayers who have made transfers but failed to pay gift tax on those transfers.  A “John Doe” summons allows the government to get information about a specific class of taxpayer it suspects may have broken the law.

U.S. taxpayers may give anyone up to $13,000 annually without that gift counting against their lifetime exemption, but gifts about this annual exclusion amount must be reported to the IRS via a Form 709, which the IRS uses to keep track of an individual taxpayer’s lifetime exemption usage.

Get started by contacting our Orange County asset protection estate planning law firm as soon as possible.

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