Deceased Client's Tax Refunds

[Lee B]

For the first time since 1992 when I started my current practice, I am preparing a tax return for a deceased client without a surviving spouse.

There are refunds due totaling about $ 3,000.  There is a will with one of 3 children named as personal representative.

However there are no probate assets  since everything was " Payable on Death" or jointly owned with the 3 children.

In Oregon, if there  are no probate assets, then there is no court appointed or certified personal representative.

Reading thru Form 1310, you just answer the questions and the refund check is issued to the personal representative in their name ?

The deceased's checking account is still open with all 3 children's names also on the account.

Any way to have the refunds direct deposited into that account ?

 

[Catherine]

On Form 1310, there is a question if there is no executor/rep, will the funds be distributed according to state law.

So mark Part 1 as C, and part 2 question 3 as yes.  Then add the name of whoever is doling out funds.

[mwrightea]

Since you can check part 2 question 3 yes, and then E file.   I would set it up for direct deposit if that is the desire of the personal rep and see what happens.  Worst case scenario they issue a paper check.

[Roberts]

I had this last year and it's a doozy. Took the IRS until March this year to pay the refund which I'm guessing is because they were waiting to see if anyone else requested the refund. I honestly could understand the point - what if a kid files late and has proof they are the court appointed executor?

 

And yes the check came in the name of the person we listed on the form.

The problem I had was that the IRS basically refused to talk about the return with anyone because the client is deceased and the court didn't appoint someone as executor. The client checkbox is meaningless if the client is deceased. Even Power of Attorney is worthless the second the client dies (for the IRS).

[Abby Normal]

People should always die owing money. So much easier.

If someone calls for a single decedent or close to death client who was making estimated payments, I always advise them to not pay any more estimated, in the hopes the decedent will owe and we can efile.

[Lee B]

Pleasantly surprised. I efiled these returns after lunch and they have been accepted.

Now I can wait and see if the direct deposit instructions are followed ?

[Bart]

6 hours ago, Roberts said:

I had this last year and it's a doozy. Took the IRS until March this year to pay the refund which I'm guessing is because they were waiting to see if anyone else requested the refund. I honestly could understand the point - what if a kid files late and has proof they are the court appointed executor?

 

And yes the check came in the name of the person we listed on the form.

The problem I had was that the IRS basically refused to talk about the return with anyone because the client is deceased and the court didn't appoint someone as executor. The client checkbox is meaningless if the client is deceased. Even Power of Attorney is worthless the second the client dies (for the IRS).

POA's are worthless for everything to everyone when the person dies.  POA's die with the person.

[Catherine]

10 hours ago, Bart said:

POA's die with the person.

They also expire with a person's incapacity *unless* they are specifically written to cover that contingency.

[Abby Normal]

1 hour ago, Catherine said:

They also expire with a person's incapacity *unless* they are specifically written to cover that contingency.

That's called a 'durable' power of attorney.

[Catherine]

On 5/4/2018 at 10:46 AM, Abby Normal said:

That's called a 'durable' power of attorney.

Yes, it is.  But most people have the kind that goes "poof" just when it's really needed.

[Lee B]

On 5/3/2018 at 5:02 PM, cbslee said:

Pleasantly surprised. I efiled these returns after lunch and they have been accepted.

Now I can wait and see if the direct deposit instructions are followed ?

I just double checked and both federal and state refunds are scheduled to be direct deposited next week.