When a Family Member Dies and They Owe Back Taxes

death and back taxes

Benjamin Franklin was right when he claimed there to be only two certainties in life: Death and Taxes. But even still, many individuals with tax debt are clueless about what it really means. Tax debt can become an issue for the family even after the debtor passes.

Tax Debt will not truly become the responsibility of the Debtor’s family once the Debtor passes away, but there are some exceptions to this rule.

  • Spouse:  When you marry an individual, you also marry their Tax Debts. The spouse you leave behind will become responsible for your IRS Tax Debt, even if they have not been made aware of it. This may seem unfair but that’s the way the Tax Code works.

  •  Descendants: Although it is rare, there are situations that would cause family members of the deceased to feel the wrath of the IRS. If the deceased leaves an estate or an inheritance to his family, it can be seized to satisfy the outstanding Tax Debt. If a family member’s share of the inheritance has already been spent, the IRS may pursue them for the funds.

Claiming Refunds: If the deceased family member is due a refund, there’s a way for his survivors to claim it. It may be necessary to File Form 1310 “Statement of Person Claiming Refund Due to a Deceased Taxpayer.” However, you do not need to file Form 1310 if you are a surviving spouse or certified representative filing an original return for the deceased.

When you pass away, you do not want to leave a Tax Burden for the ones you love. IRS Tax Debt issues are unavoidable, even in death. That being said, tax debts must take priority if you don’t want your family and loved ones to be stuck with the bill.

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