Elvin Weichbrodt: You have no way at all? You don't have to pay off your entire estate tax debt to the IRS in one lump sum. The IRS does offer monthly payment arrangements (called an Installment Agreement) on tax debt for people in situations like yours. 4 years is a long time, so I'm sure part of that $20,000 IRS tax debt is due to penalties and interest. Definitely look into a penalty abatement to try to cut that down. They might be more prone to say yes since you're taking action on your tax debt now and not waiting until they reach the point of an IRS tax lien or levy on what you own.As far as who to go to for help, I came across this site when I googled "IRS estate tax". He has some pretty good information on the subject, and he apparently used to be an IRS revenue officer: http://irs-hitman.blogspot.com/2008/10/death-and-t......Show more
Tatiana Evanosky: The IRS would only be going after you if distribution of the assets was made without the tax debt being pa! id by the estate. The executor of the estate shouldn't have given any assets without a release from the IRS. You may have a case against the executor for breach of fiduciary duty but you'll still have to pay the taxes owed. The IRS does offer Installment Agreements on tax debt for people in situations like yours. Definitely look into a penalty abatement to try to cut that down because in this may not be your fault....Show more
Queenie Ruthers: Which tax FORM is the issue?What exactly caused the tax?There are 4 different tax returns that could be the source of the problem.1. An estate return is a form 706. In 2006, the estate tax didn't kick in until the estate had mroe than $2,000,000 in assets. Surely if you received $2Mil, you'd be able to pay $20K bill. So I don't think this is it.2. An estate income tax return (income after the person died) is a form 1041. The executor fills this out and report the sale of assets. If an executor sells a house or stocks/bond! s and forgets to report the sale, this can cause a HUGE proble! m. Without a schedule D, the IRS doesn't know what the value for the asset was and thinks it's all gain. For a 2006 estate, the value of the house and stock was "stepped up" to the date of death value. Usually there isn't a huge change in value between the time the asset is sold. Let's say the estate sold $60,000 in stock and forgot to report it. $60,000 of gain is a tax bill of $20,000. $0 of gain (more likely) is $0 tax.If, on the other hand, the estate cashed out an IRA, 401K or other tax deferred asset, the money IS income. If the estate didn't distribute the money (or forgot to report it), the estate pays the tax. If the money was passed out, you would add it to your tax return and pay the tax. (Your tax rate is usually lower than the estate's.)3. Your 1040. This happens when either you get an asset and sell it or if the estate cashes it out and gives you 1041 K-1. If you were a direct beneficiary of an IRA and cashed it out, you'd get a 1099-R and yes, it ! was taxable.4. Mom's final 1040. Often when elderly get sick, they will start cashing out investments to pay medical bills. A sick elderly person may be oblivious to filing a tax return.So, it would truly help to know which form is generating the bill, what the underlying assets were and what the tax bill was. If it's an IRA, etc, you are out of luck. If it's an unreported sale (or improperly reported sale) of a house or stock or bond, it could be a paperwork issue. That is, fix the paperwork and the bill goes away....Show more
Adam Momaya: whomever administered the estate should have taken care of this before the estate was settled and closed, the estate would have paid the taxesapparently you were the administrator and did not do it right therefore the money for taxes is being charged to you as the responsible person to administer the estate
Ervin Overbee: The only way that the IRS would be going after you for estate taxes on your mother's estate is if d! istribution of the assets was made without payment of the taxes owed by! the estate. The executor of the estate never should have distributed the assets without getting a release from the IRS.You may have a case against the executor for breach of fiduciary duty but in the end you'll have to pay the taxes owed. You need to take this up with an attorney quickly. The more time that passes, the tougher it may be to go after the executor....Show more
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