Help with IRS CP105 notice - Parents owe more than 100k after gift tax miscalculation

This sounds like a complex gift tax issue that definitely needs addressing. The CP105 notice is typically just the IRS's initial notice about a potential discrepancy in gift tax reporting. First, yes, for gift splitting (where both spouses agree to split a gift), each spouse should file their own Form 709, even though the gift is from one spouse's property. Both spouses must sign each return to properly elect gift splitting. Second, the valuation difference seems significant. Life estates require specific valuation methods using IRS actuarial tables based on the ages of the life tenants. If these calculations were done incorrectly, it could explain the large assessment. I'd recommend taking these steps: 1. Request a copy of the CP105 notice and all calculations 2. Gather all documents related to the deed and gift tax return 3. Consider hiring a tax attorney specializing in gift taxes rather than just speaking with the original accountant 4. Request an extension or hold on collections while you're investigating You have options and don't need to panic. The IRS can work with you on payment plans, and if there are genuine calculation errors, those can be addressed through proper documentation.

After dealing with a similar issue last year with my in-laws' gift tax situation, I discovered taxr.ai (https://taxr.ai) which was extremely helpful for analyzing complex tax notices like CP105. It's designed to scan tax documents and explain exactly what's happening in plain English. I uploaded their CP105 notice and Form 709, and it immediately spotted several calculation issues with the life estate valuation. The IRS uses specific tables based on the ages of the life tenants, and our accountant had used outdated tables. It also flagged that we should have filed separate forms for gift splitting. What I found most helpful was that it explained exactly where the errors occurred and suggested specific steps to resolve the issue, which saved us from having to pay for hours of professional consultation just to understand the notice.

I just wanted to follow up about taxr.ai that was mentioned earlier. I decided to try it with my gift tax question since my situation wasn't as dire as the original poster's. I uploaded my Form 709 and the associated documentation, and wow - it immediately identified that I had incorrectly calculated the value of artwork I was gifting. It even explained the specific IRS regulations around art valuation for gift tax purposes and pointed out that I needed a qualified appraisal since the value exceeded $5,000. The explanations were surprisingly detailed and saved me from making a mistake that could have triggered an audit. I especially appreciated that it pointed me to the specific sections of the tax code that applied to my situation. Definitely worth checking out if you're dealing with any gift tax issues.

When I had an issue with a large IRS tax notice last year, I spent WEEKS trying to get through to someone at the IRS who could actually help. After hanging on hold for hours only to get disconnected, I found Claimyr (https://claimyr.com) through a friend who works in tax resolution. It's basically a service that navigates the IRS phone system for you and calls you back when an actual human agent is on the line. I was super skeptical at first, but you can see how it works in this video: https://youtu.be/_kiP6q8DX5c For something as serious as a $100k+ CP105 notice, you definitely want to talk to an actual IRS representative to understand what's happening and possibly request a hold on collections while you sort it out. Getting through quickly could make a huge difference in resolving this efficiently.

I need to eat my words about being skeptical of Claimyr. After failing to get through to the IRS for THREE DAYS about my tax issue (kept getting disconnected after 45+ minutes on hold), I decided to try it out of desperation. I submitted my request around 9:30am, and got a call back at 11:45am with an actual IRS agent on the line! I was honestly shocked. The agent was able to put a 60-day hold on my collection notice while I gather documentation to dispute the assessment. For anyone dealing with a serious IRS notice like the CP105 mentioned here, being able to talk to an actual person quickly makes all the difference. The agent gave me specific instructions on exactly what documentation I needed to submit and where to send it. So much better than trying to figure it out from the IRS website or generic advice.

As someone who used to work for the IRS (not speaking in any official capacity now), I'd recommend requesting a formal appeal of the CP105 assessment. You have 30 days from the notice date to request this. Common life estate gift tax problems I've seen: - Using incorrect actuarial tables for valuation - Not properly accounting for retained interests - Incorrectly calculating the gift split between spouses - Using outdated property valuations Make sure any new tax professional you hire gets copies of: - The original deed - The life estate documentation - The original Form 709 as filed - The CP105 notice with all calculation pages - Any appraisals that were done Also, check if your parents' accountant has E&O (errors and omissions) insurance. If their mistake caused this issue, their insurance may cover penalties and interest, though probably not the underlying tax.

Dealt with something similar last year. Make sure your parents get a second opinion on the valuation of the property. The IRS might be using a different valuation method than your accountant did. When we got a big gift tax bill, turns out our accountant used the county tax assessment ($425k) instead of getting a formal appraisal, and the IRS determined the value was closer to $575k based on recent sales in the area. That difference alone added like $60k to our tax bill!