return for dead son

[Bill Tubbs]

New prospective client called...

Her son died Feb 2006 (he was in his 20s, not married), before filing his 2005 taxes. So the question is whether to file his 2005 and/or 2006 taxes -- for both Federal and Hawaii. If the son would have been due a refund, 'tis a no-brainer -- file and get the money back. But, what if the son would have owed? If the client decides not to file those balance-due returns, would there be any side effects? After all, the taxpayer is dead -- if the IRS or Hawaii decides the taxpayer owes them, could the IRS or Hawaii come back after the taxpayer's parents (also serving as personal rep's)??

Thanks for any insight,
Bill

[jainen]

they should file

>>(also serving as personal rep's)<<

One of the legal responsibilities of a personal rep or executor is to file required income tax returns. The representative is PERSONALLY liable for taxes due to the extent of any assets distributed. The heirs are also personally liable up to the amount they inherited.

Although they are not in the mood to sort through their son's affairs this way, you can do it for them. Otherwise there will still be unfinished business and IRS letters in the future. So yes, they should file.

[Chief]

Even after death you pay taxes

There's some cute saying but I can recall it. You as a tax preparer should file the returns and let his parents know the final piece of action they can do for their son.

[Zee]

>>(also serving as personal rep's)<<

One of the legal responsibilities of a personal rep or executor is to file required income tax returns. The representative is PERSONALLY liable for taxes due to the extent of any assets distributed. The heirs are also personally liable up to the amount they inherited.

Although they are not in the mood to sort through their son's affairs this way, you can do it for them. Otherwise there will still be unfinished business and IRS letters in the future. So yes, they should file.

What if the son died with no assets whatsoever? I wouldn't think the parent's of a grown son would have any responsibility. Your response would seem to confirm that the representative would be liable only to the extent of assets. My guess is any refunds would go to beneficiaries or probably to the state if no beneficiaries have been named?

[Bill Tubbs]

Thank you...

to all (especially Jainen -- I pretty much quoted you when I called the client yesterday -- they said that was pretty much what they were hearing from "others"). Son had about $1600 in his checking account, and that's about all the assets his parents know about -- besides the furnishings in his rented apartment.

Turns out they had someone fill out the federal returns, but since that tax preparer still does them with paper & pen and doesn't do out-of-state returns, that tax preparer directed them to me for the out-of-state portion. (I just wish this old guy would retire -- I stand a very good chance that he will direct all his business to me!)

Bill