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Am I responsible for my deceased husbands unpaid taxes?

Newark, NJ |

My husband died 4 days ago. He was a small business owner of which I had nothing to do with. It was between him and his father. I am pretty sure he did not pay the payroll taxes or even personal taxes for this year. Will I be responsible for those taxes at all when I file taxes this coming year? We filed jointly last year.

Attorney Answers 4

Posted

You are not directly responsible for these taxes unless you file jointly in the coming year. Filing as married filing jointly or married filing separately is a year by year election and just because you filed jointly last year does not mean that you have to do it again this year. Your husbands probate estate will be responsible for the payment of the taxes if he files separately.

Any individual seeking legal advice for their own situation should retain their own legal counsel as this response provides information that is general in nature and not specific to any person's unique situation. Circular 230 Disclaimer - Advice given in this response cannot be used to eliminate penalties with the IRS or any other governmental agency.

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Posted

His estate is responsible for his taxes. You are not responsible for his business taxes, but as yoo signed jointly you may have exposure. As for this year, you should consider filing married filing separately. Finally, if you are sued by the IRS for the open prior years you may need to consider using the innocent spouse rules to avoid liability. Get with an estates/tax attorney immediately.

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Mr. Fromm is licensed to practice law throughout the state of PA with offices in Philadelphia and Montgomery counties. He is authorized to handle IRS matters throughout the United States. His phone number is 215-735-2336 or his email address is sjfpc@comcast.net , his website is www.sjfpc.com. and his blog is

LEGAL DISCLAIMER Mr. Fromm is licensed to practice law throughout the state of PA with offices in Philadelphia and Montgomery Counties. He is authorized to handle IRS matters throughout the United States. His phone number is 215-735-2336 or his email address is sjfpc@comcast.net , his website is www.sjfpc.com. and his blog is <http://frommtaxes.wordpress.com/> Mr. Fromm is ethically required to state that the response herein is not legal advice and does not create an attorney/ client relationship. Also, there are no recognized legal specialties under Pennsylvania law. Any references to a trust, estate or tax lawyer refer only to the fact that Mr. Fromm limits his practice to these areas of the law. These responses are only in the form of legal education and are intended to only provide general information about the matter within the question. Oftentimes the question does not include significant and important facts and timelines that if known could significantly change the reply or make such reply unsuitable. Mr. Fromm strongly advises the questioner to confer with an attorney in their state in order to ensure proper advice is received. By using this site you understand and agree that there is no attorney client relationship or confidentiality between you and the attorney responding. This site should not be used as a substitute for competent legal advice from a licensed attorney that practices in the subject area in your jurisdiction, who is familiar with your specific facts and all of the circumstances and with whom you have an attorney client relationship. The law changes frequently and varies from jurisdiction to jurisdiction. The information and materials provided are general in nature, and may not apply to a specific factual or legal circumstance described in the question or omitted from the question. Circular 230 Disclaimer - Any information in this comment may not be used to eliminate or reduce penalties by the IRS or any other governmental agency.

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Posted

My concern is with your statement that he even owed personal taxes for this year. Did you file married filing jointly for this year? If you did sign the tax return with an amount owing and it has not been paid in full then you are liable for this particular debt. If you did not file together and did not sign the return then he is solely responsible.

However, the IRS may still come knocking. When an individual passes away and they owe back taxes the IRS will more than likely contact the Estate to secure payment.

I highly recommend that you contact an experienced tax attorney to assist you with this matter. If the matter involves the Estate make sure you inform the Attorney of this from the outset. Not all tax firms are willing to represent the Estate.

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Posted

My condolences to you on the loss of your spouse.

In addition to the answers given to you by the other attorneys above, I understand that the federal and state/local government to who his business may have owed unpaid payroll taxes can hold not only his business liable but also -- if his small business to which you referred was an entity such as a corporation -- the government can pierce the limited liability of the entity and hold your deceased husband (and therefore his estate) personally liable.

Payroll taxes are a very serious matter as they are considered "trust fund taxes" as essentially your husband's business, assuming it had employees and incurred these liabilities, was withholding the social security/medicare taxes, along with income taxes, of the employees from their paychecks and therefore required to timely remit these payments to the government and timely file payroll tax returns.

In the end, if his estate becomes liable for payroll taxes, they can reduce any equity in whatever assets the estate has to distribute to its beneficiaries, which I assume you are one of or may be the only beneficiary as surviving spouse.

Another question you need to have answered is who are the beneficiaries of your husband's estate? Was his father -- your father in law -- a beneficiary? Who is to inherit the business? You need to consult an attorney on this matter.

As far as income taxes and income tax returns are concerned, there is joint and several liability for the spouses who sign and file a married filing joint return -- regardless which spouse is the source of the items reported or required to be reported on the tax returns. If there are unpaid income taxes from any married filing joint income tax returns filed previously, your husband's estate is liable as well as you -- unless you qualify and claim innocent spouse relief to reduce your personal burden as mentioned above. There needs to be a final income tax return for your husband through his date of death to report any income (including business income) for this year --- 2011. You may want to consider whether there will be two married separate income tax returns for tax year 2011 -- one for yourself and one for your husband through his date of death, or a married filing joint tax return. If you file as married filing separate, you are responsible for your own income tax return for the tax year for which it is filed and thus legally cannot be held responsible through the joint and several liability of a married filing joint return.

Your husband's estate may have estate tax and income tax obligations also. Your husband's estate may require a formal court appointment of an executor (of a will) or administrator (without a will) of his estate to handle any tax obligation in addition to handling any other open matters.

In the end, please consult both a tax attorney and an estate attorney to deal with these issues to determine what exposure you may personally have for income tax returns and the impact on the assets of your husband's estate, if any, from his income tax obligations and the payroll tax obligations of his small business.

Again, so sorry for your loss of your husband.

Suzanne Alexanda Ascher, Esq., CPA, Tax LL.M.

Legal disclaimer by Suzanne Alexandra Ascher, Esq: My answer is strictly for information and education purposes only and therefore my answer does not form any attorney-client relationship and attorney-client privilege between me and you. These questions and answers on AVVO.COM are no substitute for actual qualified legal advice by an actual licensed attorney in good standing with the bar who can become fully informed of your entire situation above and beyond the limited description of your situation in your question. Further, nothing posted in this public forum of AVVO.COM is deemed confidential or privileged communication. Finally, in accordance with IRS Circular 230 disclosure, federal (United States) tax advice provided in this communication is neither intended nor written to be used, and cannot be used, by to avoid penalties under the Internal Revenue Code or to promote, market, or recommend to anyone a transaction or matter addressed in this communication.

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Suzanne Alexandra Ascher

Suzanne Alexandra Ascher

Posted

Thank you, Edward Joseph Smelzer II Esq.!

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