When an inheritance or gift tax base was underdeclared, which reasons in the provision remove the underreporting surtax, and what must the file show for each?
General information · Not legal advice
Material to check
In practice material of this kind, we read the filed return and its filing date, the court papers from the ownership litigation over the inherited or gifted property and its stage on that date, the working showing which deductions and which valuation basis were used, the corporate tax determination or re-determination decision changing the deemed gift benefit, and any record of fraudulent conduct.
These are types of material to look for, not evidence already verified by PRO SE.
Where readings differ
One reading takes the exemption list as written: where the underdeclared inheritance or gift tax base is attributable to the property not yet being determined at the time of filing because of ownership litigation or a similar cause, to an error in applying the deduction provisions, to a base fixed on a value determined under the statutory valuation rules, or to a deemed gift benefit changed because the corporate tax base and amount were determined or re-determined, the surtax under the general paragraphs is not applied to the portion so underdeclared.
Another reading stresses the limits the provision itself draws: for the valuation-based ground and the corporate tax route, the exemption does not apply where the base was underdeclared by fraudulent conduct, or where the determination or re-determination itself followed fraudulent conduct, so the file has to show which listed ground is relied on and that it is not an excluded one.
Your judgment
How can the papers show that the property was still undetermined on the filing date rather than determined and simply omitted?
PRO SE does not make this decision or keep a case record on this public site.When to reconsider
We look at this again if the provision is amended to add or remove a listed ground, or if a court decision explains what proves that property was not determined at the time of filing, or when a corporate tax decision counts as a determination rather than a re-determination.