After Form 709 is filed, the Internal Revenue Service uses the information reported on the return to update the donor’s lifetime gift tax and generation-skipping transfer tax records. In most cases, no immediate action occurs unless tax is due, the return is incomplete, or the reported information requires clarification.
Processing of the return
Once received, Form 709 is processed by the Internal Revenue Service as a standalone return separate from the individual income tax return. The values, exclusions, elections, and prior-period information reported on the form are recorded to update the donor’s cumulative gift and GST tax position.
Assessment of tax due
If gift tax or generation-skipping transfer tax is shown as due on Part II of the return, the Internal Revenue Service will assess the tax based on the amounts reported. If the tax was paid with the return or with an extension, the payment is applied to the assessed liability.
Returns with no tax due
Many Forms 709 result in no tax due because gifts are covered by annual exclusions, lifetime exclusion amounts, or GST exemption. Even when no tax is due, the return is retained as part of the donor’s permanent gift tax record and affects future filings.
Requests for additional information
If information is missing, unclear, or inconsistent, the Internal Revenue Service may contact the donor or preparer to request additional documentation or clarification. This commonly occurs when valuations, trust details, or elections are incomplete or not properly explained.
Effect on future gift and estate tax filings
Information reported on Form 709 carries forward to future gift tax returns through Schedule B and may affect the amount of lifetime exclusion or GST exemption available for future gifts. Reported gifts may also affect estate tax calculations if an estate tax return is later required.
Recordkeeping considerations
Donors should retain copies of filed Forms 709 and all supporting documentation indefinitely. Prior-year returns are required to complete Schedule B and to support exclusion and exemption calculations in later years.
When corrections may be needed
If an error is discovered after filing, an amended Form 709 may be required to correct values, classifications, or elections. The form includes a specific indicator to identify amended returns.
This page explains what happens after Form 709 is filed. For correcting errors or omissions, see amending or correcting Form 709. For how the form is filed, see how to file Form 709. For the authoritative rules and official processing framework, refer to the IRS Form 709 official document overview.