Legal Question in Tax Law in California

Heirs tax responsibility for decedent

Background- My dad has terminal cancer and maybe a month to live. He has a living trust and is willing me his house. We received a letter from the IRS last week and they feel he owes $275,000 additional in taxes for 2004. This stems from a stock option he exercised. It may also be from a mistake his accountant made, no criminal intent was involved. He has to file a petition by June 24.

Question - If he dies tomorrow and the house is transferred into my name via the will in his living trust, can the IRS come back on me in the future and put a lien against the house? Again, there has been no judgment in the case and the living trust has been in place for 3-4 years. Also, can the IRS come after other people in his will he is leaving stock and cash to?

Thank you very much for your time.


Asked on 4/05/08, 8:29 pm

1 Answer from Attorneys
Jeb Burton The Burton Law Firm

Re: Heirs tax responsibility for decedent

The essential answer is yes, the IRS can come after your Dad's assets after he passes away (whether or not it is transferred out of the trust). 275,000... sounds like he needs a tax attorney who handles tax controversy. That probably is not something you should trust to the CPA (unless they have a lot of tax controversy background). I would ask your CPA to recommend good counsel on the issue.

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Answered on 4/07/08, 1:03 pm


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