Rumors are swirling that the Joint Select Committee on Deficit Reduction will recommend that the gift tax exemption amount be reduced to $1 million as early as 23 November 2011, Withers Worldwide has said in a release on tax issues.

The $5 million exemption was already scheduled to be reduced on 1 January 2013, but the “Super Committee” formed to reduce the deficit is expected to bring this forward.

Recommendations are expected to include changes to tax law, but “informed observers” say that it is highly unlikely substantial changes to the gift, estate and generation-skipping transfer taxes will be made before the next presidential elections, the law firm advises.

“The rumors serve as a reminder that the $5 million gift tax exemption has always been a temporary provision. The easiest way to ensure that the tax savings permitted by this opportunity are not missed is to fully use the exemption as soon as possible. With interest rates at historic lows, this is a great time to utilize your $5 million exemption,” says Withers Worldwide.