Estate Tax Audits Average $360,000 in Additional Tax

Although the federal estate tax is taking a break, the IRS is not taking a break when it comes to auditing estate tax returns.  New data from the IRS reveals that after the IRS audits an estate tax return, the average additional estate tax owed is $363,149.  

The use of Family Limited Partnerships tops the list of problem-causing items during an estate tax audit.  While FLPs may be popular, one practicioner warns that the IRS “‘continues to come up with better arguments against them, and the courts are beginning to listen.'”  Dow Jones, Estate Tax Audits as High as Ever, Fin. Advisor, April 19, 2010. 

Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this to my attention.