Yes, the IRS can pursue a deceased person’s estate for unpaid taxes.
When an individual passes away with outstanding tax obligations, the responsibility to settle those debts falls upon their estate. The estate is the sum of all the deceased person’s assets and liabilities, and it is typically administered by an executor or personal representative.
The IRS has a legal claim against the estate for any unpaid taxes, and it can take various actions to collect these debts, including:
- Filing a lien against the estate’s assets
- Seizing and selling the estate’s property
- Pursuing a claim against the estate’s beneficiaries
The IRS’s Collection Statute Expiration Date (CSED)
The IRS generally has 10 years from the date of death to collect unpaid taxes from an estate. However, this deadline can be extended if the IRS can demonstrate that the estate has not been properly administered or that there are other factors that justify an extension.
Exceptions to the IRS’s Collection Authority
There are a few exceptions to the IRS’s authority to pursue a deceased person’s estate for unpaid taxes. These exceptions include:
- The estate is insolvent. If the estate does not have enough assets to cover the deceased person’s debts, the IRS cannot collect any taxes from the estate.
- The taxes were not properly assessed. If the IRS did not properly assess the taxes before the deceased person’s death, the IRS cannot collect the taxes from the estate.
- The statute of limitations has expired. If the IRS does not file a claim against the estate within 10 years of the deceased person’s death, the IRS cannot collect the taxes from the estate.
If you are the executor or personal representative of a deceased person’s estate, it is important to be aware of the IRS’s authority to pursue the estate for unpaid taxes. You should take steps to ensure that the estate’s tax obligations are met in a timely manner to avoid any potential legal complications.
Do You Have to File an Income Tax Return After Someone Dies?
FAQ
What happens when a person dies and they owe the IRS?
How do I notify the IRS of a death?
Does a tax return have to be filed for a deceased person?
Who is responsible for paying a deceased person’s taxes?
Do you have to file a tax return after a person dies?
After a person dies, the administrator of his or her estate must file a tax return and report all income he or she earned prior to the date of his or her death. Typically, the administrator will file Form 1040, and he or she may also be required to file tax returns for any previous years in which the deceased person failed to file a return.
What happens if a person dies on a tax return?
The return must report all income up to the date of death and claim all eligible credits and deductions. If the deceased person did not file individual income tax returns for the years before their death, their surviving spouse or representative may have to file prior year returns.
Does a deceased person owe income tax?
In addition to the deceased person’s individual income tax, he or she may also owe tax on income earned by his or her estate. If the assets owned by the deceased person generated more than $600 in annual income prior to being distributed to the deceased person’s heirs, an income tax return (Form 1041) must be filed for the estate.
Who should file a federal income tax return for a deceased person?
That includes federal income tax returns, that the decedent would have been required to file for the year of his or her death. A personal representative can be an executor, administrator, or anyone else who oversees the decedent’s property. Read further for more information on how to file a final federal income tax return for a deceased person.