GIFTS MAY NOT BE REVALUED FOR ESTATE TAX PURPOSES AFTER EXPIRATION OF STATUTE OF LIMITATIONS.

SEC. 506. GIFTS MAY NOT BE REVALUED FOR ESTATE TAX PURPOSES AFTER EXPIRATION OF STATUTE OF LIMITATIONS. (a) In General.—Section 2001 (relating to imposition and rate of estate tax) is amended by adding at the end the following new subsection: “(f) Valuation of Gifts.—If— “(1) the time has expired within which a tax may be assessed under chapter 12 (or under corresponding provisions of prior laws) on the transfer of property by gift made during a preceding calendar period (as defined in section 2502(b)), and “(2) the value of such gift is shown on the return for such preceding calendar period or is disclosed in such return, or in a statement attached to the return, in a manner adequate to apprise the Secretary of the nature of such gift, the value of such gift shall, for purposes of computing the tax under this chapter, be the value of such gift as finally determined for purposes of chapter 12.”. (b) Modification of Application of Statute of Limitations.—Paragraph (9) of section 6501(c) is amended to read as follows: “(9) Gift tax on certain gifts not shown on return.—If any gift of property the value of which (or any increase in taxable gifts required under section 2701(d) which) is required to be shown on a return of tax imposed by chapter 12 (without regard to section 2503(b)), and is not shown on such return, any tax imposed by chapter 12 on such gift may be assessed, or a proceeding in court for the collection of such tax may be begun without assessment, at any time. The preceding sentence shall not apply to any item which is disclosed in such return, or in a statement attached to the return, in a manner adequate to apprise the Secretary of the nature of such item. The value of any item which is so disclosed may not be redetermined by the Secretary after the expiration of the period under subsection (a).”. (c) Declaratory Judgment Procedure for Determining Value of Gift.— (1) In general.—Part IV of subchapter C of chapter 76 is amended by inserting after section 7476 the following new section: “SEC. 7477. DECLARATORY JUDGMENTS RELATING TO VALUE OF CERTAIN GIFTS. “(a) Creation of Remedy.—In a case of an actual controversy involving a determination by the Secretary of the value of any gift shown on the return of tax imposed by chapter 12 or disclosed on such return or in any statement attached to such return, upon the filing of an appropriate pleading, the Tax Court may make 111 STAT. 856a declaration of the value of such gift. Any such declaration shall have the force and effect of a decision of the Tax Court and shall be reviewable as such. “(b) Limitations.— “(1) Petitioner.—A pleading may be filed under this section only by the donor. “(2) Exhaustion of administrative remedies.—The court shall not issue a declaratory judgment or decree under this section in any proceeding unless it determines that the petitioner has exhausted all available administrative remedies within the Internal Revenue Service. “(3) Time for bringing action.—If the Secretary sends by certified or registered mail notice of his determination as described in subsection (a) to the petitioner, no proceeding may be initiated under this section unless the pleading is filed before the 91st day after the date of such mailing.”. (2) Clerical amendment.—The table of sections for such part IV is amended by inserting after the item relating to section 7476 the following new item: “Sec. 7477. Declaratory judgments relating to value of certain gifts.”. (d) Conforming Amendment.—Subsection (c) of section 2504 is amended by striking and if a tax under this chapter or under corresponding provisions of prior laws has been assessed or paid for such preceding calendar period”. (e) Effective Dates.— (1) In general.—The amendments made by subsections (a) and (c) shall apply to gifts made after the date of the enactment of this Act. (2) Subsection (b)—The amendment made by subsection (b) shall apply to gifts made in calendar years ending after the date of the enactment of this Act.