Sanford Millar writes that one of the areas of inquiry that is certain to receive increased attention by the IRS and Department of Justice (DOJ) is the claim that the funds in offshore accounts were the result of a “gift”. The proper documentation of gifts is essential. What does proper reporting mean? First a quick summary of the reporting rules.
In the case of a “gift” from a non-U.S. person to a U.S. taxpayer if the gift totals $100,000 of more (in the aggregate) in a single calendar year a Report of Foreign Gift, Devise or Bequest (IRS FORM 3520) must be filed. The failure to timely file the form can result in penalties up to 25% of the gift.
To read more see Reporting Foreign Account Gifts | Sanford Millar – JDSupra.