Common Estate Tax Audit Triggers and How to Avoid Them

An Estate Tax return is 8 times more likely to be audited than a Personal Income Tax return and the average recommended additional tax per return is $216,697.00!

Jill Miller, Esq., authored an article in the August 2007 issue of Estate Planning Magazine entitled, Common Estate Tax Audit Triggers and How to Avoid Them.

You can view Jill Miller's Curriculim Vitae at ttp://www.mtrustlaw.com/miller.php

Her premise is: Recognizing the issues in the preparation and filing of an estate tax return that are most problematic for the Service allows tax practitioners to take preventive measures to reduce the risk of audit selection. There were 10 audit issues explored in depth. We would like to highlight one of relevance to our customers.

Audit issue no. 6: Failure to include and/or value all of the decedent's assets (particularly hard-to-value assets)

The failure to include and/or value all of the decedent's assets, particularly hard-to-value assets, contributes to a broad range of audit issues in the preparation of the estate tax return.

Small details such as properly reporting the accrued interest on a certificate of deposit, or stock dividends and stock splits, are searched for by the IRS examining estate tax attorney and, where present, will give a positive impression that the return was carefully and properly prepared. The omission of items that should have been reported on Schedule B (Stocks and Bonds)…of Form 706 is also a favorite audit item of the Service.

We're ESI and we can help you minimize the possibility of an IRS audit. We are experts in global stock and bond valuations for Trusts and Estates since 1985.

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