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What constitute abuses by POA?

Asked about 2 years ago - Des Moines, IA

POA and Trust Lawyer (who set up revocable trust) failed to file income tax for year 2000. They received reminders about unpaid tax from IRS before grantor died, but ignored reminders. Are they responsible for unpaid tax and penalties after death of grantor, or are beneficiaries?

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Late penalties were charged for another late filing during the time of Grantor's life.
Should the IRS be notified of name and address of POA and TRUST LAWYER so they can be contacted to pay the taxes due and penalties charged?
Would failure to file 2000 tax (despite reminders from IRS)constitute abuse of POA and/or breach of ethics by trust attorney?

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Attorney answers (1)

Dennis Daniel Duffy

Reputation Level 8

Answered about 2 years ago. Estate Planning Attorney in Davenport, IA.

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As the agent the person named in the POA would have had a fiduciary duty to file the tax return for the principal or to make sure that someone was engaged to do so. A fiduciary that failed to do this would be potentially personally liable for their acts or failure to act.

You should consult with an attorney that can review the matters you outline and explain the various options for settlement of this matter. The attorney should be someone who takes on possible professional malpractice claims of this type.

Duffy Law Office

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