Can IRS seize daughters inherited IRA account due to deceased parents tax debt?

Asked over 1 year ago - Modesto, CA

My sister just received a letter from the IRS regarding an IRA account that we both inherited when our father passed away. I haven't received anything yet, but now I am waiting. Basically, from what I understand, it states that there is a tax debt left by our father who passed away over a year ago. He had a house that was sold. It had been refied so there wasn't much money from it when it sold and as of now, its gone. There was a small bit of life insurance and an IRA account that was divided between us. Since there is no real estate left, can the IRS freeze or seize the IRA? If so, for how long? And is there any arguing against the IRS? Thank you.

Attorney answers (1)

  1. Ronald J Cappuccio


    Contributor Level 16


    Lawyers agree

    Answered . Most States prohibit the IRS from seizing IRA's and retirement accounts. You need to check with a tax and estate attorney in the state where your father resided. If the life insurance proceeds were paid directly to you and your sister, the IRS has no claim against it. If the proceeds were paid to the estate, it is subject to the claims of creditors, including the IRS.

    I am sorry for your loss.

    Ron Cappuccio

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