That's really a question for an accountant.
And there are multiple issues involved. Depending on how much was gifted (over a certain limit), there may be tax issues either for the parents or for the client.
Why, then, did the client then deed the property to his parents? That just "smells funny." Was he trying to avoid something? Or were the parents laundering the money? In other words, while what occurred there may be perfectly legal in and of itself, it's possible that the motives weren't "pure."
Then there's a question of whether there are any transfer taxes due. I don't know the answer to that. If there are transfer taxes, then those do have to be paid.
There's also a question of the basis value of the land. And there may be an imputed value, and taxes due on that.
So, in short, there are a whole lot of possible pitfalls. Maybe, ultimately, there won't be any tax issues at all. I'm not an accountant and even if I were I don't have the information necessary. But your client really, really must see an accountant as soon as possible.
Hope that helps.