Can You Amend a Gift Tax Return?

It is possible to amend a previously filed Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return. The Internal Revenue Service (IRS) provides a method for correcting errors, though there is no dedicated form like the Form 1040-X for income taxes. Instead, the process involves filing a new Form 709 for the same calendar year as the original return.

This procedure is for taxpayers who discover mistakes after their return has been submitted. An amended return ensures that your gift tax history and available exemptions are accurately recorded. This helps maintain compliance with federal tax law and prevent issues with future gift or estate tax liability.

Circumstances Requiring an Amended Return

A primary reason for amending a gift tax return is the incorrect valuation of a gifted asset. For instance, if a formal business valuation establishes a different fair market value than what was initially reported, an amended return is needed. This allows you to report the correct value and adjust the use of the lifetime gift tax exemption.

Another common situation involves the omission of a reportable gift. A person might make several gifts and forget to include one on their original Form 709. Discovering this requires filing an amended return to add the previously unreported gift and ensure the lifetime exemption is calculated correctly. The statute of limitations for the IRS to assess the gift will not begin until the gift is adequately disclosed on a return.

Errors in applying exclusions or exemptions also necessitate an amendment. For example, a taxpayer might fail to properly document spousal consent for gift splitting. An amendment to make this election is only valid if filed before the original due date of the gift tax return. Mistakes in allocating the Generation-Skipping Transfer (GST) tax exemption are another reason for filing an amended return.

Required Information and Form Preparation

To begin the amendment process, you will need a complete copy of the original Form 709 that was filed, along with its attachments. You also need the new or corrected information that prompted the amendment, such as a revised appraisal or documentation for an omitted gift.

The correction is made by using a new, blank Form 709 for the same tax year as the return you are amending. It is important to use the form corresponding to the year the gift was made, as tax laws and exemption amounts can change annually. Prior-year forms are available on the IRS website.

When you fill out the new Form 709, you must complete the entire form with the corrected information, not just the changed items. The amended return replaces the original filing, so all gifts, deductions, and exemption calculations must be re-entered with the updated figures.

You must attach a separate statement to the amended return that explains the reasons for the changes. This statement should include your name, Social Security number, the calendar year of the gift, and a line-by-line description of each correction. For example, state that an item on Schedule A is being amended to change a reported value to its newly appraised value.

How to File an Amended Gift Tax Return

When filing, you must check the “Amended return” box located at the top of the first page of Form 709. This box informs the IRS that the submission is a correction to a previously filed return and not a duplicate filing.

The explanation statement should be attached to the front of the amended Form 709. All other required schedules and new supporting documents, like a revised appraisal, should be attached to the return as they would have been with an original filing.

You must mail the amended return to the IRS service center designated for filing Form 709, which can be found in the form’s instructions for that year. Be aware that the mailing address can differ depending on whether you are including a payment or using a private delivery service.

If the changes on your amended return result in additional gift tax owed, you should submit payment with the return to avoid further interest and penalties. If the amendment results in a tax overpayment, the return will serve as a claim for a refund. The IRS will process the amended return, which can take several months.