Client called today with the following story. A glitch in their mortgage life insurance company's computer listed the husband as deceased. They received a letter from the company along with a check (not to pay off the mortgage, a return of some premiums). Thinking it was a scam they ignored it. But when other letters came, they looked into it and soon discovered that the news of his supposed death had spread to credit reporting agencies, Social Security and the IRS. They thought they had gotten it straightened out when he passed a background check for a firearm in November, only to discover it is still not resolved. The wife received stimulus for her but none for him. The kickers are that their mortgage wasn't paid off, their is no death certificate and he has worked all year and still has SS taken from his paychecks. They are concerned as to what will happen when they go to file taxes this year. Any help or suggestions would be appreciated. Thanks!
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What do they think will happen? I don't think they will be arrested and charged with a crime. Worst case, they will have to respond to an IRS letter, assuming they file a complete and accurate tax return. That's pretty much the only choice they have, to answer your direct question.Originally posted by Justataxguy View Post
Have you seen any evidence of all their claims? I wonder about the "glitch" in the life insurance policy - if the company thinks the husband is dead, why aren't they paying off per the insurance policy? Why did they think it was "straightened out" in November (again, what evidence was there)? Why is anyone surprised that he had SS taken out of his paychecks (the employer has no cause not to, and does not report individual wages until the W-2s are filed in year following the paycheck dates)? How do you know what his status is at SSA? Did he have an online account at SSA, if so has it been logged into?
It also seems odd that they expect you to be able to do anything about it. Again, all you can do is prepare and file their accurate tax return, as you have done in prior years (these are prior year clients, I hope, otherwise I recommend you disengage immediately).
Last edited by Rapid Robert; 01-04-2021, 01:53 PM."You said it, they'll never know the difference. Come on, we'll paint our way out!" - Moe Howard -
About 20 years back I had a client who was listed dead because another man with the exact same name including middle name actually died. His SS check stopped. He had to make an appointment to go to the local SS office to prove he was alive. So my suggestion would be to contact SS first and the credit reporting agencies.Taxes after all are the dues that we pay for the privileges of membership in an organized society. - FDRComment
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Yes they are long time clients just looking for some help. Nobody thinks they will be arrested. Tell me how a supposed dead person can pass a background check for a firearm.Originally posted by Rapid Robert View PostComment
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Not sure... maybe they aren't really "supposed dead"?Originally posted by Justataxguy View Post
My helpful suggestion was to just file the tax return like you always do. You said they were "concerned as to what will happen" when they file. What do you or they think might happen? I suggested it might eventuallly result in responding to an IRS letter. I guess your alternative is to leave him off the return, or report him on the return with a date of death, but I don't recommend that, as I don't think it will be helpful.Originally posted by Justataxguy View Post
Like ATSMAN, I also suggested looking into his status at SSA. If they don't already have their own online account access (every working adult should), then now is a good time for them to look into creating it.
"You said it, they'll never know the difference. Come on, we'll paint our way out!" - Moe HowardComment
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