[WSBAPT] Decedent's Taxes & IRS Tax Liens

Mon May 15 11:29:38 PDT 2017

IRS does not release liens unless taxes are paid or unless application is made for subordination or discharge of particular property which IRS does if it sees monetary value from doing so.  Liens have a built in expiration date generally knowable from the face of the lien except for circumstances which can toll the collections statute of limitations, and thereby extending the lien which is tied directly to the collectability of the debt.  the problem is a practical one.  IF there are no assets to distribute over and above death and last illness expenses there shouldn’t be a problem with a lien.  If there is real estate and a lien is filed, then the lien attaches, usually in regular order of priority by filing dates, period.   I will defer to to others on the declaration of completion, except I think you could recite that there are not funds to pay taxes, or that attorney spoke to IRS who said this and that.  

From: Kristina devore 
Sent: Monday, May 15, 2017 10:59 AM
To: WSBA Probate & Trust Listserv 
Subject: Re: [WSBAPT] Decedent's Taxes & IRS Tax Liens

Thanks Dalynne!

I do have an Order of Insolvency.   When you closed, how did you address the lien or taxes owed? 

Thanks,

Kristina

Kristina S. DeVore | Attorney & Counselor at Law

KRISTINA DEVORE LAW FIRM, pllc | 201 NE Park Plaza Dr., Ste., 290 | Vancouver, WA  98684

Phone: (360) 695-0535 | Fax (360) 737-4154 | Kristina at devore-law.com

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From: <wsbapt-bounces at lists.wsbarppt.com> on behalf of Dalynne Singleton <dalynne at glgmail.com>
Reply-To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Date: Monday, May 15, 2017 at 10:39 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] Decedent's Taxes & IRS Tax Liens

I recently had a conversation with the IRS about an estate that would be insolvent based on the taxes owed.  He told me that I had to have an Order of Insolvency from the court and then IRS would not take any further collection action BUT WOULD NEVER RELEASE OR WITHDRAW THE IRS TAX LIEN.  So, even though estate was then insolvent and I was not paid to prepare the docs or attend the hearing, I did it and got the Order of Insolvency.  Then, I closed the Estate.

Dalynne Singleton

Gourley Law Group

Snohomish Escrow

The Exchange Connection

1002 10th Street / PO Box 1091

Snohomish, WA 98291

360.568.5065

360.329.4079

360.568.8092  fax

dalynne at glgmail.com

LICENSED IN WASHINGTON AND OREGON

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From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Kristina devore
Sent: Monday, May 15, 2017 10:31 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] Decedent's Taxes & IRS Tax Liens

I have a similar issue with the IRS.  IRS audited the Decedent’s taxes for the year prior to death and has determined that more taxes were due. The estate is insolvent and there is no money from the estate to even pay attorney fees.  The PR has been working with the accountant who filed those taxes but the accountant won’t take my calls.  There were some non probate assets.  I life insurance policy that went to an ex spouse and an IRA that went to Decedent’s two children both of which should not be available to satisfy creditors. 

No creditors will be paid and, besides the tax issue, the estate is ready to be closed.  Will the IRS release their claim in a situation like this?

Thanks,

Kristina

Kristina S. DeVore | Attorney & Counselor at Law

KRISTINA DEVORE LAW FIRM, pllc | 201 NE Park Plaza Dr., Ste., 290 | Vancouver, WA  98684

Phone: (360) 695-0535 | Fax (360) 737-4154 | Kristina at devore-law.com

This email message is covered by the Electronic Communications Privacy Act, 19 USC Sections 2510-2521.  Unauthorized review or distribution of this email message is strictly prohibited.  This e-mail message is intended for the exclusive use of the person or persons to whom it is addressed.  This email message may contain information that is privileged and/or confidential. If you believe that you have received this message in error, you are hereby notified that any dissemination, distribution or copying of this communication is strictly prohibited.  Do not disseminate this e-mail and destroy the original e-mail and any copies. If you have received this communication in error, please notify us immediately, and destroy the original message.

From: <wsbapt-bounces at lists.wsbarppt.com> on behalf of "John J. Sullivan" <sullaw at comcast.net>
Reply-To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Date: Friday, May 12, 2017 at 10:19 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] Decedent's Taxes & IRS Tax Liens

Paul:

Not a good idea. Be careful. For back income taxes IRS cuts in line ahead of general creditors and behind last illness/burial. 

http://www.hodgsonruss.com/newsroom-publications-8881.html

John Sullivan

Sent from my iPad

On May 12, 2017, at 12:34 PM, Paul Neumiller <pneumiller at hotmail.com> wrote:

  I have been assisting Girlfriend (GF) probate Decedent’s estate (long cash-depleted illness).  Will says everything goes to GF.  There is little to no money but a residence with some equity.  GF has successfully dealt with all creditors and has filed Decedent’s tax returns.  We were able ready to close probate but GF just received a Notice of Intent to Seize Property or Rights to Property from the IRS for about $9k  for the past three years for Decedent’s taxes (news to me).  While I plan to bring in an accountant to advise the GF vis-à-vis the IRS, I am curious, what horrible things, if any, would happen to GF if we used a PR Deed and transferred the residence to GF before the IRS slapped a tax lien against the house?  Is this a fraudulent transfer?  If not, can the IRS force her to sell the house in order to pay Decedent’s back taxes.  We have been able to negotiate with all other creditors to accept pennies on the dollar.  

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