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Your Deceased Loved One and IRS Debt - Who Has to Pay the Tab?


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Saying goodbye. . . What happens when a loved one passes away and leaves an IRS debt behind? Does that debt fall onto you? Or can the IRS collect on a deceased person's tax debt at all?

The only way the debt can fall to you is if you filed jointly at which point you would become the primary debtor and still owe the IRS.

A family affair. . . However, if that isn't the situation then who does have to pick up the tab? After all the IRS doesn't like to give up on any money it's owed; even if the IRS has to dig up grandpa's corpse to get it. I never had to disrespect the final resting places of the dead when I was an IRS-Hitman. We took care of seizing any personal valuable before your loved one went into the ground.

The bare bones. . . Here's how things work when a deceased loved one owes the IRS. The executor of the estate has to inventory all assets. Once that is done any debts the deceased had prior to his/ her death are paid, and the remaining assets both liquid and non liquid is distributed among the beneficiaries per the Will.

That assumes there is an estate or assets to sell and pay off creditors. For example if assets or property were transferred prior to or upon death, if stated in a Will, there isn't anything collectible. In the case of there being nothing of value to satisfy the creditors or the IRS then the account is closed as non collectible.

You may end up in debt too. . . However, before you start to enjoy your new found inheritance there are some things that you should know; because the IRS plans for the assets dear old grandpa left you in his Will. Some of that inheritance is taxable and some isn't. It's important to know the details of your inheritance so that you don't end up in a pickle with the IRS too.

  • Life Insurance payouts are non taxable. That's because Life Insurance isn't considered income because it's used to take care of the deceased's funeral and provide for family.

  • Lump sum cash inheritance is considered income and is therefore taxable. If you receive a lump sum inheritance then you need to report it on your taxes as income and be prepared to pay taxes on the amount.

  • Property such as houses or cars is non taxable unless they're sold. Any proceeds from the sale of inherited assets are also considered income and must be reported on your taxes.

    Having to go through the death of a loved one can be difficult enough without having to worry about the IRS getting involved.

    Now you have the smoking gun. . . Use it!

    Richard Close was an IRS-Hitman. He worked as a revenue officer for the IRS and his father was the head of the collections branch for 30 years; so it runs in the family. He left that behind and now he's partnered with Tax Defense Network to help thousands of Americans with their tax problems. He gives the tips and tricks for you to fight the IRS and win! Visit him at: or , or contact: email or 1-888-248-9058.

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