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

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.

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Attorney answers 1


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

If you do not like this answer or disagree, please look at one of the other answers provided. It is not necessary for you to try prove this answer is "wrong" or something with which you do not agree. This is a free service for you based on limited facts. Nevertheless, many times you need to consult an attorney with the details to get actual advice specific to your concerns. Do not put too many details in your questions or comments because this makes the information public and could hurt you. Government Regulations contained in IRS Circular 230 regulate written communications about Federal tax matters, including e-mail, between us and our clients. This is another attempt by the government to limit your rights and to extend the control of government over individuals and businesses. Nevertheless, such communications are either opinions or other written communications. This is not an opinion. It is other written communication and was not written to be relied upon, by itself, to avoid any tax penalties. In order to receive assurances of protection from tax penalties from a written communication, you should get an opinion letter. If you would like to discuss an opinion letter relating to any matter, please contact me and I will explain what is involved and what it will cost.

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