Backstory:
My father passed away a few years back sick and broke. He lost his house and any real assets along with his health do to a hit n run. He died with a car and a few hundread dollars in his acct and simple household posessions and medical debt. His only real asset is a couple acres of undevelopable land that he and his sister inheirited. They were both on the title and she is still living.
My problem:
3 years later the irs sent me a letter claiming he owes $30k for years he quit filing returns. The amount owed is a guestimate based off of his previous returns prior to leaving work. The years in question by the IRS are years that he was out of work, and recieving disability. What do I do, how to i get the irs to acknowlede he was out of work and not skippong oit on taxes? ive sent copies of his disability etc. And havent heard a single word back in 4 months. They continue to send letters asking for the balance, so what ive been able to do is getting me nowhere, does anyone have any insight ? Any help is greatly apreciated as I am disabled with a slew of condtions, i do t have the money or energey to fight this.
Thanks for any info or help.
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Send them a death certificate! Just wondering what’s going to happen with that land.
OP: Why are they reaching out to YOU?
Were you the executor of you Dad’s estate? Or did you inherit anything of value through the estate?
You are not obligated to pay your father’s tax debt, if he has any. Have you tried calling the IRS by phone?
First thing to do here is determine if that’s legit the IRS. Second off, that’s not your debt because debts don’t get passed down unless you’re from some country that does things like that.
A lot of bad advice here (except what taxxprt mentioned).
Call the IRS and find out more information. They are a lot more helpful than most people would assume. You may just have to file taxes a 1040 for those years and they may provide information on how to get it done if *you* are the person that needs to do it.
I think the main problem is that you probably aren’t authorized to represent your father with the IRS. They have strict protocols on who can communicate with them on behalf of another person. Since he is deceased you would need to file Form 56 with the IRS in order to get information about why IRS thinks he owes money.
However I don’t think you need to do anything, unless you are the executor of your father’s estate. The executor of an estate would have been legally responsible to file any tax returns that were required before distributing any assets.
I’m not entirely sure if the land counts as an asset, because it’s possible his sister inherited the land when your father passed away (joint tenancy with the right of survivorship). But again, may not be your problem unless you were supposed to inherit his share of the land.
If IRS is sending mail addressed to your father, cross out his name & address on the envelope and write RETURN TO SENDER – DECEASED. Do not sign for any certified mail from IRS addressed to your father. There’s no need for you to try to fix this mess unless you legally are required to do so.
Tons of helpful comments here but I just want to add I also went through a Dad death with IRS complications and when filing his last tax return, our tax office said the IRS is YEARS behind due to COVID. Literal years. So any correspondence you send, send it certified mail with a delivery confirmation sent back to you and keep all receipts and dates of delivery. They may still send letters and it could just be because they haven’t processed any of yours yet or gotten to that tax year. So our office advised to keep sending copies of the confirmations of delivery if you keep getting letters and “please cite X letter delivered on X date for the most up to date correspondence” etc. It may take multiple tries before they close the case. Very sorry for your loss ❤️
In a case like this I’d just forward a death certificate and hopefully that’s solves everything
They may want to put a lien on that property and sell that car. They are entitled to the proceeds of his estate.
This is a bit detailed and anyone can correct me but I have spent the better part of the last 3 years dealing with probate for my fathers estate.
First, if he had a will or living trust, then you should consult an estate attorney to help determine how the assets and property can be distributed.
Second, if there was no will or trust, then I am sure your fathers estate will need to go through probate. This is essentially the state helping dictate how his estate should be legally settled with all assets and debts. You are not responsible for any debts but his assets will legally cover any debts before they are distributed. The property value (cost basis) will reset to the date of his death but because it is co-owned, that value will be an asset. That plus the value of the car (less any payments owed) plus cash are the assets that will cover debts, including tax liabilities. Getting this resolved will require several items but a lawyer and tax specialist is advisable.
Third, your father is responsible for tax returns and a tax specialist could help you complete the returns for when he was still alive. This should resolve their incorrect calculation. This actual debt will need to be paid. The estate will also need to be closed at some point and a final tax return completed. It would require selling the property, you buying his sister out, or her buying you out if you are in probate.
All of these items are annoying to complete but it will allow you to sell the property free and clear and avoid any issues on distribution of assets from the estate.
If the assets don’t cover the debts, there isn’t a great reason to complete all of this unless you want to protect the property from foreclosure.
Hope that helps.
First off, PLEASE don’t listen to the vast majority of the posts here. If people do not know what they are talking about it’s okay to just not say anything. Yes, the IRS can get gangster on you and no, they don’t give two $hits about the situation. I was a corporate tax auditor for several years and they likely sent out an NPA based upon what they believe to be the case. They don’t need reported info or some person using your SSN. Also, there is no SOL on unfiled tax returns. There is an EA above who posted some decent info. I’m also happy to help, free of charge if it’s not TOO complicated (about half of the time they are because people tend to leave out very very important info). Feel free to set up an appt to talk, if you like, at http://www.Truudus.com. I can at least take a peek at whatcha got and give an opinion on how best to proceed. But PLEASE ignore all the folks jumping on the soap box and telling you what the IRS CANT do. Al Capone was a murderer and one of the baddest gangsters ever. He went to prison for… tax evasion.
As with not hearing from them the IRS has been in a nose dive since Covid and have been severely understaffed. I’ve been head butting over them in a matter from 2019 and that’s been going on since 2021. They actually lost my amended tax return so my tax guy had to do it all again.
>His only real asset is a couple acres of undevelopable land that he and his sister inheirited
Everyone seems to agree that this is land is the only real issue here – if that didn’t exist then you could just ignore the IRS since there was no estate
So the only question remains is how the land was titled (https://www.reddit.com/r/personalfinance/comments/yr50ag/dad_passed_away_with_nothing_and_now_the_irs_is/ivsicmj/) and if it was part of the estate what value does the land have.
A couple of acres of land can be either very valuable or nearly worthless depending on where it is located.
Since OP stated “undevelopable land” I’m guessing the latter. If that’s the case and if OP’s sister really doesn’t care about the land then maybe its a non-issue, e.g. worst-case IRS seizes it and sister doesn’t mind. If sister doesn’t want the land potentially to be taken then I guess go through all the steps to satisfy the IRS.
Some law schools have nonprofit tax clinics to help people navigate the IRS bureaucracy. You need to meet the income requirements. Worth looking into if you have a tax clinic near you.
Was the letter addressed to you or him?
Keep calling the IRS until you get through and explain to them. YOU don’t owe them anything.
Not a attorney. Some experience dealing with estates of my parents.
That said, assuming you’re in the US: Did you open probate after your father’s death? You need to do so to transfer assets including real property in his name to his heirs by will or state law. Any IRS claim is a claim against the Estate of the deceased. Only the court appointed executor or personal representative has right to file tax returns for the deceased, settle debts, and distribute assets. You, as an potential heir, have no rights to act on behalf of the deceased.
If you’ve already open and closed probate, all debts or other claims are voided and dismissed by the court if not filed during the probate period. So if true, no assets are left in the fathers name, then you can tell the IRS to pound sand. They’ll still send letters but waste taxpayer money is all they can do.
If you’ve not done that, then you need to get on it. Also look at way the property was held. If held with a beneficiary deed or joint tenancy, the property interest and title passes to the beneficiaries or to the other owners when the owner dies. It skips probate entirely. If held as tenants in common, the the estate owns your dads interest and the IRS or other claimants could go after that interest.
You need an probate attorney if any of this discussion is to foreign to you.
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Was is the estate probated, and were you the executor for the probate process?
Is it possible the IRS is talking about deferred taxes on the acres of land? If you own this land now with your aunt, is it possible they’re talking about deferred taxes? When the status of the land changes, the new owner may be liable for taxes that were deferred due to the land being in, for example, farm deferral.
Really serious question— how do I not incur my own father’s debt? We are completely estranged. Will I be responsible for his financial mishandlings?
If your dad didn’t leave you anything just dont accept inheritance , so, his debts to. Check lawyers consultation if that may work like that.
So…my question is…why should he have to respond at all? Its the father’s debt not his, there’s no estate to take the money from.
Are the letters addressed to you or to your father? Was his estate probated and were you the executor? I’m assuming it wasn’t since he didn’t have any assets to probate, most states let you transfer a car to beneficiaries without having to open a probate, the cost of probate isn’t worth it for a few hundred in a bank account, and I’m assuming title to the property he inherited passed to his sister as a matter of law.
There’s nowhere for the IRS to collect from and you don’t owe the IRS for your father’s debt if you didn’t inherit anything from him. You don’t have to waste your own money hiring an accountant to fix this if you’re not the executor if his estate. It’s not your responsibility.
Go to a CPA now.
My parents didn’t do taxes for 10 years . A good cpa will help with the returns and worth every penny .
Contact your congressman…or your senator. They all have constituent services departments that specialize in helping people they represent with the bureaucracy of the federal government.
Just know that the IRS has fallen dreadfully behind. I bet the paperwork you’ve sent is stuck in some inbox somewhere and hasn’t even been looked at yet.
Get a tax attorney or a CPA specializing in taxes. You’ve tried talking to them and now you need some help.
What if this is somehow a scam.
Debt doesn’t get passed down, whoever is in debt and dies, brings the debt to their grave.
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I don’t think you need to pay it. The debt is not in your name. I’d try calling the IRS too to make sure it’s not a scam
Couple, three things. First, my condolences for your loss. Sincerely.
Next, as others have mentioned, you’re not liable for anyone else’s debts. Legally, your father is now “estate of dad” and whomever has been designated estate executor by the probate court has the task of tracking down his money and putting it all in an estate bank account.
The IRS absolutely knows how this works. They know you’re not liable. If they’re claiming he hadn’t paid taxes (executor has to file a final return), you’ll have to track down some paperwork to prove it. Even given all that, the basic steps are to gather all the money he had and file it with the probate courts (of the county where he lived).
If there’s not enough to cover his obligations, that’s usually the end of it. Again, creditors KNOW this. The IRS knows this. If you’re the court appointed executor then you now need to go on a paperwork hunt and rifle thru your dad’s files. I had to do the same after my mom died. It was tedious and I could have paid some lawyer $5000 to do the same work but I didn’t have the money.
If you feel overwhelmed, write back to the IRS (always write back, no phone calls except as a follow up to the letter) saying the work is in progress. Communication is key.
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Do not START paying or else you may be forced to finish paying on it. It’s not your responsibility what your father did. Forget about it
I’ve read a few articles lately about firms trying to test this…Mainly in Medical debts for old folks homes.
Do not under ANY circumstances agree that you owe the debt. Don’t infer that you plan to pay it, look into it, etc. The second you give them leeway to say you accepted the responsibility for the money, they will start with the legal action and try to jerk you around until you fold and pay it off. They know they don’t have a leg to stand on, but the courts don’t care, they just want to speed things along. So odds are, you’ll get ran over like a doormat and end up owing the money.
From all I’ve read, it seems to be a real growing problem, where the company knows it can’t recover the money, so they come up with devious ways to make other people assume the burden.
I have a bad feeling we’re going to see much more of this sort of behavior in the future.
Just ignore them. You aren’t responsible for your parents debts. They will send bs like this to try to collect but ultimately they can’t take any action against you.
Technically the IRS can come after you for your parents debt. You are required to file taxes for your dad. In this case I assume since your dad did not file for a couple of years, the IRS can require you to do so.
https://www.irs.gov/individuals/file-the-final-income-tax-returns-of-a-deceased-person
Your best option here is to work with an IRS agent. Call and talk to an agent. Try to figure out how those taxes are calculated. Disability can be taxed depending on how the policy was paid for. Remember, they can only collect the value of your inheritance and not your personal assets.
Why are you worried about a dead person’s tax?
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