Trust Updates Archive
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(April 26, 2016 --Chicago, IL) -- Internal Revenue Service audits of trust, estate, and gift tax(TEG) returns in 2015 found more errors, but in lower dollar amounts, which is in stark contrast to prior years. Total additional taxes owed on audited TEG declined by more than 64 percent compared to 2014 and 83 percent compared to 2013. While the more than $775 million collected by the IRS is substantial, it is the smallest amount collected in the last 8 years and the first time total TEG audit collections have dropped below$1 billion. In dollar terms, the largest reduction in additional taxes owed was on audited gift tax returns, which spiked in 2013; estate collections were also down. Trust tax returns were the only category which saw collections comparable with prior years. The drop in additional taxes owed comes even as IRS auditors are finding more mistakes per return. The reason auditors are finding smaller dollar errors may be driven by the significantly larger dollar errors of the past few years; pushing preparers to more carefully review returns. IRS focus remains on large estates, those over $10 million. Additional taxes on all audited estate tax returns accounted for more than 55 percent of total additional taxes collected, or $428 million. Of that amount, 76 percent was collected from large estates. Either IRS auditors are combing over large estate tax returns more carefully or preparers are making more errors than on returns of smaller estates. The IRS declines to comment on what drives spikes or declines in tax revenue. However, a spokesman insisted the agency does not "target" TEG returns, adding that "many factors" can result in variations year over year. TEG returns include the forms 1041 (trust or fiduciary return), 706 (estate tax return), and 709 (gift tax return). For more information, see the current issue of Trust Regulatory News. ************************************ DATA BOOKS Trust Performance Report -- annual data book, published in May, provides both industry and peer group performance data by assets, gross revenue, net income, and account category. Subscribers receive quarterly updates. TPR findings are based on its annual survey of the top 1500 fiduciary institutions. For more best practices and benchmark data see TPR. For information on ordering click here or the link below. Fiduciary Earnings & Expenses -- annual data book comparing performance among independent trust companies to that of OCC national trust companies and to bank trust divisions. For information on ordering click here or the link below. For sample copies of both publications click here and then, on the web page, check "Trust Performance Report." ******************** No statement in this issue is offered as or should be construed as legal opinion or advice or as an indicator of future performance. To subscribe to Trust Updates or for a trial subscription go to http://www.trustupdates.com/Subscribe/Free_and_Trial/ To unsubscribe to Trust Updates go to To subscribe, click on the link below : • Trust Regulatory News • Trust Performance Report or • Fiduciary Earnings & Expenses Subscription request can also be sent to "circulation@trustupdates.com" or by calling 800-404-2116. • 1992-2016 Copyright© A.M. Publishing, Inc., Trust Regulatory News |