How can the IRS collect from a deceased person when there is no estate?

UPDATED: Sep 10, 2012

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How can the IRS collect from a deceased person when there is no estate?

My mother died about 2 1/2 years ago. She had no Will or property but did have a transfer on death account worth about $140,000 which was cashed out under her SSN and distributed in equal shares to her children. The IRS wants the family to complete a tax return for her. What do you advise?

Asked on September 10, 2012 under Estate Planning, Texas


Catherine Blackburn / Blackburn Law Firm

Answered 10 years ago | Contributor

I am not tax lawyer or tax accountant.  I suggest you get one and follow their advice.  The Internal Revenue Code defines "estate" in a very broad way and definitely will reach the bank account that you mentioned.  It does not matter that no one opened a formal probate for your mother.

On the other hand, $140,000 is well below the federal estate exemption applicable 2 1/2 years ago.  It is very likely that no estate tax will be due.  I cannot speak to any estate taxes applicable to your state as Florida has no estate tax.

You may be liable for penalties as a result of failing to file a return.  This is why I strongly recommend that you find a good accountant with IRS experience to help you.  With that assistance, you should be able to wrap this up with a minimum of difficulty.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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