It is not uncommon for our clients to come to us long after they made gifts to their children or others. They usually do not mention it, I think, because they believe it is under the total exemption amount (currently at $5.12 million through the end of 2012), so nothing needs to be done.
In actuality, if you make a gift of over $13,000 to any individual you required to file a gift tax return. You can use your unified credit to offset this amount and not pay any gift tax. Well, what is the penalty if we do not file the return?
The IRS has concluded that underpayment interest on an unreported gift runs from the due date for reporting the gift, even though unified credit would have been available to fully offset the tax on the gift had it been reported. Since unified credit was fully used on a subsequent gift that was reported, it could not be applied against the earlier gift.
Please do not forget to let us know if you made any gifts during the year so that we can insure you do not pay any unnecessary interest. If you have any questions regarding this provision or any gift tax provision, please do not hesitate to contact us.