Deceased mother back taxes owed?
Terry – I found paperwork from 2018 and 2019 where my Mother withdrew $25,000 from a traditional IRA and didn’t have any taxes taken out. She passed January 1st of 2021 and I am sure she didn’t file taxes for 2018, 2019 and 2020. From I what I can see her income including her social security for both 2018 and 2019 was about $46,000 each year. I cannot find any correspondence from the IRS about her taxes or any tax returns. I have submitted the forms to get copies of her tax transcripts for the last five years but I haven’t received anything from the IRS yet. I’m worried that as the Trustee of her trust and now her estate fiduciary that I will have to file her back taxes. I don’t want to assume the IRS is just going to forget about it. Should I just wait to see what they send me for the tax transcripts?
Terry Says
I showed your question (not your name!) to the IRS. Here is the response:
Terry, Yes. From what you have here, it looks like a return is required for each of those years. A key duty of any trustee or estate administrator is to make sure all debts and obligations, tax or otherwise, are resolved before any assets are distributed.
The transcript request is a good way to verify whether returns were ever filed, especially if it doesn’t appear that there are any copies in her records. If she lives in a state with an income tax, checking with that state’s revenue department is also a good idea.
This is a reminder to all to keep estate plans updated, and keep good records. Otherwise you are creating quite a job for your executor or successor trustee~!
