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New Gift/GST tax form.

The IRS has issued new Form 8892, Payment of Gift/GST Tax and/or Application for Extension of Time to File Form 709, to request an extension to file Form 709, United States Gift (and Generation-Skipping Transfer Tax) Return, when a donor is not applying for an extension to file an income tax return. The donor uses this form to pay gift or generation-skipping transfer (GST) tax when applying for an extension to file Form 709. New Form 8892 applies to gift tax returns for calendar-year 2004 and thereafter.

Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return, is used to apply for an automatic four-month extension. An extension to file a 2004 calendar-year individual income tax return also extends the time to file Form 709 for 2004; however, it does not extend the time to pay gift or GST tax for that year. To pay gift or GST tax, new Form 8892 must be used, because Form 4868 no longer contains entries for gift or GST tax payment, as it did in past years.

When to use Form 8892: Previously, certain Form 709 extensions were requested by letter; Form 8892 replaces that need. It is used to request an extension to file Form 709 if an individual:

1. Is not applying for an extension to file an individual income tax return (Form 1040) or

2. Has already obtained a four-month extension to file Form 709 on Form 4868 and needs an additional extension for Form 709 only.

Individuals who obtain an additional Form 1040 extension with Form 2688, Application for Additional Extension of Time To File U.S. Individual Income Tax Return, need not file Form 8892, because Form 2688 will give them an additional extension to file Form 709. However, they must use Form 8892 to pay gift or GST tax.

Of course, an extension to file Form 709 does not extend the time to pay the tax. Thus, individuals who have obtained an extension to file Form 709 with Form 4868, but who owe gift or GST tax, must file Form 8892 to pay the gift tax. Likewise, if they received an additional extension to file Form 709 with Form 2688, they must use Form 8892 if they need to pay gift or GST tax.

When to file: Individuals filing Form 8892 to pay gift or GST tax should file by the gift tax return due date (generally, April 15 of the year following the year of the gift). If they file this form to obtain an extension to file, they should file by Form 709's regular due date (or by its extended due date, if a previous extension was granted). The form should be filed sufficiently early so that the Service can respond before the regular or extended due date; this can prevent a late firing penalty should the IRS deny the request.
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Title Annotation:FROM THE IRS
Author:Laffie, Lesli S.
Publication:The Tax Adviser
Date:Jun 1, 2005
Words:484
Previous Article:Tax court may not exclude special trial judge report from record on appeal.
Next Article:2004 IRS Data Book statistics.


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