Can't get IRS to process final return for estate--suggestions?

[Anonymous]

Does anyone have ideas about how I can move this situation along? There's a wealth of knowledge on this board I'm hoping someone might have a good idea.

My parent died in 2020 and left a small estate. I am the PR. I have done everything necessary to close the estate--paid debts, deposited checks, sold assets, filed final tax returns, state and federal.

The state return came back long ago. I cannot get the IRS to process the final, simple return. I have filed with the taxpayer advocacy service and can't get a reply. I have contacted constituent services with my member of the H of R, which so far, has yielded nothing. Until the final return is processed the Register of Wills is saying that I cannot distribute assets, which my siblings and I would like to put to use. Not being able to close the estate means I'm also living my parent's death instead of being able to put it behind me.

Is there a good reason to get a lawyer at this point? So far I have been doing everything myself. Is there anybody else I can complain to? This is ridiculous--until I can close the estate I am still required to pay a bond and file reports with the Register of Wills. I want to be done with all of this. Help me, wise minds of DCUM!

[Anonymous]

I will quote my estate attorney who said that the IRS is “a hot mess right now”

I would have advised you to hire a lawyer from the start. I think it would be hard to handle an estate on your own, and I am an attorney.

But you could just wait. Hopefully the IRS will be better staffed somewhat soon given the increase in funding.

For people who ask why people put things in revocable living trusts, this is a good example of why

[Anonymous]

Anonymous wrote:I will quote my estate attorney who said that the IRS is “a hot mess right now”

I would have advised you to hire a lawyer from the start. I think it would be hard to handle an estate on your own, and I am an attorney.

But you could just wait. Hopefully the IRS will be better staffed somewhat soon given the increase in funding.

For people who ask why people put things in revocable living trusts, this is a good example of why

Transfer-on-death documents for brokerage and bank accounts are also useful to allow heirs to receive funds in a timely manner. Sorry I have no advice for you, op, but hopefully others can make changes to avoid what you are dealing with. And hopefully someone here can offer you something.

[Anonymous]

IRS is indeed a hot mess. I had a taxpayer advocate case and it took over a year just fro them to get back to me (I believe their response time is supposed to be 30 days). It ended up being 2 years from start to resolution on my case.

I have paper-filed returns filed months ago and I bet they're just sitting on a mailcart in Ogden, Utah right now.

The thing in this case is you have indeed filed the returns, they just haven't been processed -- you have a copy of the signed return, and probably the delivery receipt to show it was given to the IRS. Isn't that enough to proceed?

[Anonymous]

My estate accountant filed a “Request for Prompt Assessment.” I’m not sure how much good it does in terms of processing time, but it does limit the statute of limitations to 18 months. I think you can still file it, but I’m not an expert on these things. You also need to file a form 5495, a request for discharge from personal liability, which discharges you from personal liability after 9 months.

Honestly, it wouldn’t hurt to consult with a good tax accountant. I’m a lawyer and pretty savvy about these things, and I didn’t feel comfortable handling an estate without professional help.

https://www.irs.gov/forms-pubs/about-form-4810

https://blog.myestategenie.com/consider-requesting-prompt-assessment-of-decedents-income-taxes-590caeb8ab4

[Anonymous]

Anonymous wrote:I will quote my estate attorney who said that the IRS is “a hot mess right now”

I would have advised you to hire a lawyer from the start. I think it would be hard to handle an estate on your own, and I am an attorney.

But you could just wait. Hopefully the IRS will be better staffed somewhat soon given the increase in funding.

For people who ask why people put things in revocable living trusts, this is a good example of why

A trust doesn’t eliminate the tax issue. The trustee would still need to ensure that the decedents and estate’s taxes were filed & paid before distributing the remainder of the assets.

[Anonymous]

Why did you even file a return for a small estate? The large majority of estates (like 98%) don’t require a return. That may be your problem.

[Anonymous]

Anonymous wrote:Why did you even file a return for a small estate? The large majority of estates (like 98%) don’t require a return. That may be your problem.

My understanding is that it is the final tax return for the deceased parent.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Why did you even file a return for a small estate? The large majority of estates (like 98%) don’t require a return. That may be your problem.

My understanding is that it is the final tax return for the deceased parent.

NP here: You definitely have to file a final return for the deceased. But OP, I was able to distribute the assets for my sister’s estate without the final return being processed. My 2021 return is still sitting unlooked-at in Ogden, too, but I was able to close the estate and hand out the assets to my sister’s kids. Maybe because I wasn’t a beneficiary? I don’t think so, though. Are you working with an attorney? I just did it when my attorney said I could.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Why did you even file a return for a small estate? The large majority of estates (like 98%) don’t require a return. That may be your problem.

My understanding is that it is the final tax return for the deceased parent.

Ah, this is a final income tax return, not an estate tax return. I was confused.