Hi Glenn:

Before the 1986 Tax Act, gifts made within 3 years of death were considered made "in contemplation of death" and were included in the 706. But you're too young to remember that.

Since 1986 the "within 3 years of death" has two consequences. Life insurance payments or gifts within 3 years of death are includible. Also cash expended for gift tax within 3 years of death is added back.

When a 706 is audited, typically they look for gifts closer to the date of death than looking back 3 years; at least that's my experience.