Back state income tax owed by dead Mom?

[denovo92]

What is the name of your state (only U.S. law)? IOWA

My mother-in-law died in Iowa 3 years ago (we live in another state). My wife was the exector of the estate. Today we got a note addressed to Mom from the Iowa Dept of Revenue saying she underpaid her Iowa Income Taxes in 2005, and owes $900+ in taxes and interest (no penalty assessed). What is our responsibility here?What is the name of your state (only U.S. law)?

 

[LdiJ]

What is the name of your state (only U.S. law)? IOWA

My mother-in-law died in Iowa 3 years ago (we live in another state). My wife was the exector of the estate. Today we got a note addressed to Mom from the Iowa Dept of Revenue saying she underpaid her Iowa Income Taxes in 2005, and owes $900+ in taxes and interest (no penalty assessed). What is our responsibility here?What is the name of your state (only U.S. law)?

As the executor of the estate your wife was responsible for filing her mother's final tax return, and its accuracy. However she would not be responsible for any tax returns prior to that if the estate has already been closed.

 

[denovo92]

elaboration...

As executor of the estate, my wife did file her Mother's final return, for 2006 (the year she died), and there were no problems with that return. Her Mom filed her own return in 2005 (it was the last one filed before her death), but apparently neglected to declare some source of income on the state return...

 

[LdiJ]

As executor of the estate, my wife did file her Mother's final return, for 2006 (the year she died), and there were no problems with that return. Her Mom filed her own return in 2005 (it was the last one filed before her death), but apparently neglected to declare some source of income on the state return...

I don't know if others would agree, however my advice is to ignore the letter and if any others come, don't open them, just write "return to sender, deceased" and send them back.

One of the reasons that I suggest that is because its possible that the state isn't even correct. Many states are operating now, under a policy of scare tactics, where they think that maybe someone owes them some money, and sends them a bill for tons more than they could possibly owe, in order to scare them into 'fessing up to whatever it is that they really DO owe, or proving that they owe nothing.

I am seeing it more and more. The frustrating thing is that they are often doing it for years far enough in the past, that the taxpayer doesn't have the records to prove whether or not the owe anything.

 

[denovo92]

Thanks for the input, LdiJ... much appreciated

I don't know if others would agree, however my advice is to ignore the letter and if any others come, don't open them, just write "return to sender, deceased" and send them back.

I'm interested in hearing about it if others do disagree, but this sounds like a reasonable course of action and corresponds with my gut response. Anyone convinced this is a mistake?

 

[tranquility]

The downside is the possibilty mom's estate will have a much harder time challenging a deficency assessment. I don't disagree with the advice, but wouldn't make it without looking at all the facts.