New York Estate Planning & Elder Law Blog
The news that the First Family protected their assets from additional taxation is now the subject of Congressional debate over potential reforms to federal estate tax law. Following the announcement that the New York Department of Taxation and Finance (“DTF”) is looking into near future audit of the Trump family estate, similar Internal Revenue Service {“IRS”) code was called into question. If existing federal and state tax statute is allowing taxpayers estate tax loopholes, what are the consequences for government finance? Tax dodgers usually seen as a limited segment of the American population, may in fact represent a far greater proportion of taxpayers than thought. Allegations that President Donald Trump’s father’s estate had applied fraudulent accounting methods to avoid higher estate taxation, apparently has saved the family millions that would have otherwise been owed to the government.
Congressional review of tax loopholes in FY18Q4.
With democrats keenly focused on review of what might be federal IRC loopholes present within Part 4. Examining Process, Chapter 25. Estate and Gift Tax, Section 1. Estate and Gift Tax Examinations, future reform is likely. The current rules lower the valuation of estates based on minority ownership of assets, and the result is a lower tax bill. As tax experts point out, controlling shares are more valuable than minority shares. Distribution rules to shares of an estate allow for families to report split shares. Violation of current law occurs when an estate reports transfer of minority shares, exclusively; reducing the reported valuation of an asset. Congressional attention is now being given to IRS and New York DTF enforcement of existing federal and state laws. The IRS budget reportedly dropped more than $800 billion between 2010 and 2017 during the Obama Administration.
Will New York tax law reform follow?
In New York, state tax statute allows for DTF penalization of taxpayer reporting omissions or misstatements. This includes failure to accurately and knowingly report gift tax or estate tax related records. Erroneous valuation of estate property transferred between family members is reason for audit. Exception to the state’s statute of limitations for audit of taxpayer record may be made if a court has found that transactions have not been reported. Estates not reporting family transfers of property where transactions are on record are in violation of IRS and DTF code. If you have an estate subject to audit due diligence by the IRS or DTF, an estate law attorney can help.
Contact a licensed New York estate law attorney practice to find out about how federal and state tax rule reform will apply to your estate assets.
Estate Law Attorney Practice
Ettinger Law Firm is a licensed New York attorney practice specializing in estate planning and probate litigation. Contact Ettinger Law Firm to schedule a consultation about an estate tax law related matter.
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Recent Changes to Internal Revenue Service AFRs for Gifts and Estates