When you act as a fiduciary for another person or entity, such as the Executor of an Estate, you have a responsibility not only to the estate personally, but to the beneficiaries and the federal government, namely the IRS. If you do not honor your obligations, you can be held personally liable if you fail to follow the rules.
In a recent case, the IRS was allowed to proceed with attempting to collect unpaid Estate tax liability from the Estate’s executors in their capacity as executors. The Estate’s primary asset was 29 parcels of real estate. The beneficiaries of the Estate received the properties and the Estate also paid debts to other creditors. However, the Estate did not pay the IRS. The government then attempted to collect the Estate’s tax liability from the Executors individually, and the government won.
If you have a fiduciary responsibility to an individual or an Estate, you must honor your fiduciary responsibility, including paying taxes to the IRS. If you fail to honor your fiduciary obligation, the IRS can come after you personally!
Are you a fiduciary for someone else or for an Estate? Are there unfiled tax returns or unpaid liability? Call us, we can help!