Posted on 08/20/2014 12:55:18 PM PDT by Cementjungle
RANT!
It's a frustrating situation to have in your hands a check from the US Treasury for over $141,000 and you can't do a darned thing with it except frame it and hang it on the wall as a souvenir.
My MIL passed away in 2011, and my wife (as the only surviving relative) was named in the will as the executor of the estate and successor to the trust. The will was filed with the courts in L.A. and the long process began.
We paid the IRS $240K the first year in estimated estate taxes along with a request for an extension. The next year we filed the 706 and were refunded $68K. My wife transferred her mom's properties into her name and sold them, dealt with bank accounts, IRA and other investments.
Last year we get a notice from the IRS that the estate filing had been chosen for an audit... so we did all the work involved in that. The IRS attorney wound up REDUCING the estate and then finally (recently) issued her a check for over $141K. Great... except the check is useless.
The check is made out to my wife (on line one) and on line 2 it says (Estate of..... her mom's name). Our banks (Chase and B of A) will not touch the check because there's no account with the name of "Estate of XXXXXX". We showed them the will naming her as executor, the trust agreement, the IRS estate filing, the subsequent tax filings for her mom's trust, the correspondence with the IRS that led to the refund.
No go... since this was a trust there was no probate court... but the banks insist on a letter from a probate court. We can't probate the estate because the estate has already been properly settled.
We called the IRS attorney... he was very nice, but said there's nothing they can do.... and this happens a lot. He says you just have to keep trying different banks until you can find one that will take the check.
Anyone here have any experience with this sort of thing?
As an awkward workaround had you not been able to resurrect that bank account, she could have endorsed it back to the IRS as a “quarterly payment.” (If possible at an IRS field office.) Call, make certain the funds were applied to the primary SSN. The primary is whichever of you is listed first on your 1040.
Then, make absolutely certain you file your taxes as early as possible next year. Request direct deposit for your refund. Call and make certain this happens.
What you did is better, since you would not receive any interest.
sounds like a job for lowbridge!
Clever idea indeed.... that would probably work too, who knows.
*Ping* in case you can offer some advice.
Yup, I get several of those each week. Are the actually coming from you, MR Kart...?
And what happens if I respont to Suleman Bello...?
This is urgent for me...I have several of these waiting for a response from me...Millions of dollars at stake!
Nope. Back in the days when I worked in an estates and trusts law practice, I was just a typist!
Thanks :-)
My assumption is that they owed no tax. IF they owed no tax it would have been refunded.
Had they owed, the IRS would have retained any amounts necessary to pay any tax due. Of course, that is also not a bad thing and means that you are not subject to interest and penalty, to liens and seizures, lawyers bills for lawsuits, public humiliation when your name is in the local newspaper as a tax scofflaw, comparisons to Cheat’n Charlie Rangle, etc.
It is also imperative that once you do this you ALWAYS file within 3 years of the due date for that tax year, and confirm that your return was received. The Refund Expiration Date is three years after the due date and they will NOT refund any prepaid credits to you if you file your return after that date!
We filed for an extension after about 3 months after her death, and sent with that a check for $245K.
A year later we filed the final form 706 which called for a refund of $68K, which they promptly sent us.
Several months later we were informed that the estate filing had been chosen for an audit. That process resulted in a year-long ordeal of getting things re-appraised, getting old bank statements and so on.
The audit resulted in a reduction of the overall estate value. They did nail it for "gift taxes from the 1970's" but otherwise was quite favorable.
The final refund check did actually include about $4K in interest that the IRS gave back to us... which surprised me.
They do pay interest if they held your refund more than 45 days. The interest starts on the return due date.
I’m glad you got your refund. That doesn’t always happen!
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