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<p class="MsoNormal"><span style="color:#1F497D">Thanks Tom! Do you think a PR's liability to the IRS survives discharge following closure of an estate (<a href="http://app.leg.wa.gov/rcw/default.aspx?cite=11.96A.070">RCW 11.96A.070(2)</a>)? I am thinking of
just the kind of nightmare-for-the-PR scenario you mention: PR searches the decedent's papers but doesn't see any problem, completes the probate and is discharged, and then IRS pursues the PR for liability on decedent's unfiled tax return from a decade before.
Under IRS rules, there is no statute of limitations on unreported tax years; the S/L doesn't start accruing until a return is filed.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">It seems to me, your standard operating procedure and mine are the same: PR needs to review the decedent's papers, but unless something obvious crops up, there is no duty to explicitly ask the IRS whether the
decedent has filed all previous tax returns. I think that's right; but the Form 56 led me to second thoughts.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">Sincerely,<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">Eric<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">Eric C. Nelsen<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">SAYRE LAW OFFICES, PLLC<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">1320 University St<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">Seattle WA 98101-2837<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">phone 206-625-0092<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:#1F497D">fax 206-625-9040<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
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<p class="MsoNormal"><b><span style="font-size:10.0pt;font-family:"Tahoma","sans-serif"">From:</span></b><span style="font-size:10.0pt;font-family:"Tahoma","sans-serif""> wsbapt-bounces@lists.wsbarppt.com [mailto:wsbapt-bounces@lists.wsbarppt.com]
<b>On Behalf Of </b>Tom Stuen<br>
<b>Sent:</b> Thursday, December 11, 2014 5:14 PM<br>
<b>To:</b> 'WSBA Probate & Trust Listserv'<br>
<b>Subject:</b> Re: [WSBAPT] Administrator duty to search for indications of pre-death unfiled tax returns?<o:p></o:p></span></p>
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<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><span style="color:#1F497D">Eric: I use a form 5495 request for release. And obtain a transcript if it appears that tax returns were not filed. I think the PR is responsible for taxes to the extent of funds distributed to beneficiaries.
I once represented an estate where the deceased received a deficiency notice 9 years after he had failed to file.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"> Tom Stuen<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
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<p class="MsoNormal"><b>From:</b> <a href="mailto:wsbapt-bounces@lists.wsbarppt.com">
wsbapt-bounces@lists.wsbarppt.com</a> [<a href="mailto:wsbapt-bounces@lists.wsbarppt.com">mailto:wsbapt-bounces@lists.wsbarppt.com</a>]
<b>On Behalf Of </b>Eric Nelsen<br>
<b>Sent:</b> Thursday, December 11, 2014 3:25 PM<br>
<b>To:</b> WSBA Probate & Trust listserve (<a href="mailto:wsbapt@lists.wsbarppt.com">wsbapt@lists.wsbarppt.com</a>)<br>
<b>Subject:</b> [WSBAPT] Administrator duty to search for indications of pre-death unfiled tax returns?<o:p></o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">How far does a PR's duty go to determine if a decedent failed to file income tax returns? I have typically made sure that the decedent's final 1040 is done, but unless something obvious crops up in the review of decedent's papers, I don't
do a huge search or explicitly query the IRS for records to ensure they've been filed in all prior years.<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">I ask because I am having second thoughts about IRS Form 56, Notice of Fiduciary Relationship. The instructions seem to require filing one for PR as fiduciary for the estate (that is, estate tax and post-death income), and one for PR as
fiduciary for the decedent (that is, pre-death income). In Section B entitled "nature of liability and tax notices," it essentially asks the PR to say, "yeah, I'm liable for all income tax returns of the decedent." Seems a bit much to me.<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">Am I overthinking?<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><span style="font-size:12.0pt">Sincerely,<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt">Eric<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt">Eric C. Nelsen<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt">SAYRE LAW OFFICES, PLLC<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt">1320 University St<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt">Seattle WA 98101-2837<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt">phone 206-625-0092<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt">fax 206-625-9040<o:p></o:p></span></p>
<p class="MsoNormal"><o:p> </o:p></p>
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