ataxquestion[at]yahoo.com posted:

- quote -

A true gift is never taxable to the recipient. But note the word
"true." If you have a business relationship with the giver, then the
gift may be considered a bonus or supplemental side benefit, and
therefore be taxable.

Headlines have been made within the past week by famous folks who
overlooked gifts of significant value that were related to their
business functions.

Please note while the recipient has no tax consequence, the giver may
have to file a report if the gift is greater in value than $13K (as of
the year 2009, and subject to change).

Bill

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Say someone got a cash gift of say $1000 in 2006, $4000 in 2007 and
didn't report it, unaware they were supposed to treat it as income.
Now they're concerned this could come back on them and wants to amend
their return for those years.

Is there a way to know what the interest/penalties could potentially
be on this? Or is it at the discretion of the IRS?

Also of concern are other possible problems it could cause. If one's
sibling also got a cash gift, is the IRS likely to look at them as
well once they've been alerted that one of them has gotten this gift?
Would doing something like this cause the IRS to put one on some kind
of scrutiny list or the like? Will they just take your word that this
is how much the gift was? In one case a photocopy of the check was
made before it was cashed, in another case it wasn't. Neither was
deposited.

What do you see as the realistic up side & down side of just
forgetting about it and not doing anything about it?

Thanks

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >