Under the illusion that all obligations to the IRS cease at the time of death? Don’t be. The old adage – the only things certain in life are death and taxes – should be changed: the only thing certain in life is death, taxes, and the audit of your estate tax return.
In an uncharacteristically brief and plainly worded statement, the IRS concisely defines estate tax as what you pay “for your right to transfer property at your death. It consists of an accounting of everything you own or have certain interests in at the date of death.”
Learning the ins and outs of filing an accurate estate tax return can be challenging on all levels, not just because you’re probably still mourning the loved one. The most important question is – whether the estate is required to file an estate tax return. If the answer is yes, then you face complications concerning valuation of assets, which will affect income taxes of the future generations when the asset is sold. The average taxpayer and even the most sophisticated accountants aren’t necessarily familiar with the basic Internal Revenue Code involving estate taxes.
If your loved one’s estate is required to file an estate tax return, you can be almost certain that the IRS will audit that return, as it is the last time the IRS will ever be able to tax the deceased person. If an incorrectly prepared estate tax return does trigger review by the IRS, it can result in heavy penalties and interest against the estate, and in some extreme cases, the representative can be held personally liable.
You need a competent and experienced tax boutique, such as Law Offices of Christy Lee, P.C., to ensure that the estate tax return is prepared accurately.
If you’re acting as personal representative of an estate, or if you’ve been tagged for an IRS audit involving an estate tax return, give us a call. We can assist you with all phases of estate administration, including counseling you on problems concerning the estate tax return and preparing and filing it for you. When the return is audited, we will represent the estate during the audit and associated hearings. Let us help you ensure that the estate remains in financial order according to the IRS’s view so that you can focus on more important things, such as dealing with the loss of your loved one.
Our goal is to minimize the stress and interference in your personal life during the audit, while at the same time securing a favorable outcome and encountering little risk that the IRS will expand the audit beyond the years already under examination. Handled with professional care, your audit should not be a taxing experience.