915 / What are the requirements for filing the gift tax return and paying the tax?
Editor's Note: The IRS created a gift tax reporting safe harbor for Trump account contributions made on behalf of children under age 18 via Revenue Procedure 2026-25.
A donor need not file a gift tax return if the only gifts made during the calendar year are covered by the annual exclusion ( Q 905) or the marital deduction ( Q 912), or are gifts to charity of the donor's entire interest in the property transferred where the donor does not (and has not) transferred any interest in the property to a noncharitable beneficiary. (Amounts paid on behalf of an individual as tuition to an educational organization or to a person providing medical care are not considered gifts for gift tax purposes.)1 However, in the case of a split gift (where the donor's spouse joins in making a gift to a third party), a gift tax return must be filed even though the amount of the gift comes within the spouses' annual exclusions.
The return (Form 709) is due on or before April 15 following the close of the calendar year for which the return is made; however, if the donor is given an extension of time for filing the income tax return, the same extension applies to filing the gift tax return. Where a gift is made during the calendar year in which the donor dies, the time for filing the gift tax return is not later than the time (including extensions) for filing the estate tax return.2 However, should the time for filing the estate tax return fall later than the 15th day of April following the close of the calendar year, the time for filing the gift tax return is on or before the 15th day of April following the close of the calendar year, unless an extension (not extending beyond the time for filing the estate tax return) was granted for filing the gift tax return. If no estate tax return is required to be filed, the time for filing the gift tax return is on or before the 15th day of April following the close of the calendar year, unless an extension was given for filing the gift tax return.3
The penalty for failure to timely file a federal tax return is 5 percent of the tax for each month the return is past due, up to a maximum of 25 percent. The penalty can be avoided only if "it is shown that such failure is due to reasonable cause and not due to willful neglect."4 The regulations say that "reasonable cause" means that the taxpayer filing a late return must show that he "exercised ordinary business care and prudence and was nevertheless unable to file the return within the prescribed time."5 In United States v. Boyle,6 the Supreme Court held that a taxpayer's reliance on an agent who says he will file the appropriate tax return does not avoid the penalty tax for failure to make a timely filing. However, the Court was careful to distinguish the case where the taxpayer relies on his tax advisor to determine whether a return should be filed at all. In Estate of Buring v. Commissioner,7 the estate avoided the penalty tax because the Court found that the decedent had relied upon her accountant's advice in failing to file gift tax returns for substantial advances of cash the decedent made to her son, even though the accountant apparently had not actually advised her that it was not necessary to file gift tax returns.
The gift tax is payable by the donor on the date the gift tax return is due to be filed (April 15). An extension of time given to file the return does not act as an extension of time to pay the tax.8 If the donor does not pay the tax when it is due, the donee is liable for the tax to the extent of the value of the gift.9 If an extension of time for payment of the tax is granted, interest compounded daily is charged at an annual rate adjusted quarterly so as to be three percentage points over the short term federal rate.10 The underpayment rate for the second quarter of 2026 is 7 percent.11
1. IRC § 2503(e); IRC § 6019.
2. IRC § 6075.
3. IRC § 6075; Treas. Reg. § 25.6075-1(b)(2).
4. IRC § 6651(a)(1).
5. Treas. Reg. § 301.6651-1(c)(1).
6. 105 S. Ct. 687 (1985).
7. TC Memo 1985-610.
8. IRC §§ 2502(c), 6151(a).
9. IRC § 6324(b); Comm. v. Chase Manhattan Bank, 259 F.2d 231 (5th Cir. 1958).
10. IRC §§ 6601(a), 6621(a)(2).
11. Rev. Rul. 2023-04.