Notice 2010-19 by ProQuest


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									Part III. Administrative, Procedural, and Miscellaneous
Guidance for Persons Making                      INTERIM PROVISIONS                                26 CFR 601.105: Examination of returns and claims
                                                                                                   for refund, credit or abatement; determination of cor-
Transfers in Trust After                                                                           rect tax liability.
                                                     Some taxpayers may have inaccurately
December 31, 2009                                interpreted section 2511(c) as excluding
                                                                                                   (Also: Part 1, §§ 6662, 6694, 1.6662–4, 1.6694–2.)

                                                 from the gift tax transfers to a trust treated
Notice 2010–19                                   as wholly owned by the donor or the
                                                                                                   Rev. Proc. 2010–15
PURPOSE AND BACKGROUND                           donor’s spouse under subpart E of part I
                                                 of subchapter J of chapter 1, even though         SECTION 1. PURPOSE
    This notice alerts taxpayers that the        those transfers would otherwise be tax-
Internal Revenue Service (IRS) intends           able under Chapter 12. The provisions of              This revenue procedure updates Rev.
to issue guidance under section 2511(c)          Chapter 12 regarding the substantive law          Proc. 2008–14, 2008–1 C.B. 435, and
of the Internal Revenue Code. Congress           applicable to the gift tax were not amended       identifies circumstances under which the
enacted this section in section 511(e) of        by EGTRRA, and those provisions con-              disclosure on a taxpayer’s income tax re-
the Economic Growth and Tax Relief Rec-          tinue to apply to all transfers made by           turn with respect to an item or a position
onciliation Act of 2001 (EGTRRA) and             donors during 2010. Section 2511(c) is an         is adequate for the purpose of reducing
amended it in section 411(g)(1) of the           addition to those substantive law provi-          the understatement of income tax under
Job Creation and Worker Assistance Act           sions and is applicable to transfers made in      section 6662(d) of the Internal Revenue
of 2002. Public Laws 107–16, 115 Stat.           2010. Section 2511(c) broadens the types          Code (relating to the substantial under-
71, and 107–147, 116 Stat. 46. Section           of transfers subject to the transfer tax un-      statement aspect of the accuracy-related
2511(c) is effective for transfers made          der Chapter 12 to include certain transfers       penalty), and for the purpose of avoiding
after December 31, 2009, and before Jan-         to trusts that, before 2010, would have           the tax return preparer penalty under sec-
uary 1, 2011.                                    been considered incomplete and, thus, not         tion 6694(a) (relating to understatements
    Section 2511(a) generally provides that      subject to the gift tax. Accordingly, each        due to unreasonable positions) with re-
the gift tax shall apply to transfers in trust   transfer made in 2010 to a trust that is not      spect to income tax returns. This rev-
or otherwise, whether direct or indirect.        treated as wholly owned by the donor or           enue procedure does not apply with re-
Under § 25.2511–2(b) of the Gift Tax Reg-        the donor’s spouse under subpart E of part        spect to any other penalty provisions (in-
ulations, a gift is complete when the donor      I of subchapter J of chapter 1 is considered      cluding the disregard provision
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