Death and tax liability

[Jake]

I had a client die unexpectedly a few days ago he owed the IRS about $16,000 and he was making monthly payments. The taxpayer filed as single. My question is what happens to this debt? Do we need to notify the IRS? Will the IRS file a lein against the estate? any help or references would be appreciated.

Thanks

Jake

[kcjenkins]

If he owned any property, they might file a lien, but most likely they will simply write it off unless he has significant assets. And the fact that they were letting him make payments leads me to think he does not. Since your profile does not indicate where you are, it's hard to make any significant suggestions.

[Jake]

If he owned any property, they might file a lien, but most likely they will simply write it off unless he has significant assets. And the fact that they were letting him make payments leads me to think he does not. Since your profile does not indicate where you are, it's hard to make any significant suggestions.

Thanks KC for the information and the not so subtle reminder to update my profile.

[kcjenkins]

It was a hint, but it was also a genuine comment, because some state laws make a real difference, when someone dies, in how the assets are treated. For example, if you are in AR, and you own a house with your spouse, and you owe the IRS but they have not filed a lien, the house will automatically transfer to the spouse's sole ownership, subject only to obligations on file at the DOD.