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Are there fines & penalties for Tax debts to heirs after death of tax evader ?

Palm Springs, CA |

A wealthy US Citizen died in Europe after having lived there for over 50 years - in all this time never (!) filing for taxes. He also had a kind of tax-evasion-company in Liechtenstein. (Bonds and other papers in secret)
If the probate gets sent to the US - will they look into the taxes automatically ? And, if they do and the assets are taxed - will there be fines on top? Are there statues of limitations after a person died?

For Clarity: 1.) For establishing, whether probate gets reinstated in Europe, will the taxes be looked into automatically? 2.) Are there fines on assets for the heirs (or the assets) PLUS taxation? (non-US Citzen heir) 3.) Substantial Gifts to non US-Citizen before death - will they be taxed after death as well? 4.) how many percent interest rates and how many years back will they count? (I am contesting the will against the sole heir and need substantial potential threat for an outside-of-court agreement)

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Attorney answers 4

Posted

You say "to heirs" and this seems strange. Penalties and punishments will be potentially meted out to the estate, and it may get smaller as a result.

Curt Harrington Patent & Tax Law Attorney Certified Tax Specialist by the California Board of Legal Specialization PATENTAX.COM This communication is general information and not legal advice, and does not create an attorney-client relationship. This communication should not be relied upon as any type of legal advice. Please note that no attorney-client relationship exists between the sender and the recipient of this message in the absence of either (1) a signed fee contract and (2) remission of an agreed-upon retainer. Absent such an agreement and retainer, I am not engaged by you as an attorney, nor is any other member of my law firm.

Asker

Posted

Thank you! So I take it that there ARE penalties and punishments on top of the debts also for deceased. But if the estate doesnt have enough to pay all of the debts and penalties, does the ( non US-) heir have to come up with the rest? I would also appreciate it if you could tell me if the question of taxes comes up by probate automatically, since the heir ( my opponent) will surely do nothing to encourage the question of not filing fot FTB and IRS at all.

James P. Frederick

James P. Frederick

Posted

No. Heirs are not responsible for debts of the deceased.

Posted

If you are contesting a will you need a lawyer, and a good one, especially in the situation you describe. Your questions should be addressed to your lawyer. You are in deep water here. The issues you raise about tax liability are very difficult even for most lawyers. As an attorney, I certainly would not represent a client in a will contest in the situation you describe without expert tax advice. If you don't have an attorney, get one now and be prepared to spend a lot of money on legal fees.

Any opinions stated in response to Avvo questions are based upon the facts stated in the question. Responses to Avvo questions are for general information purposes only, and should not be construed or relied upon as legal advice.

Asker

Posted

Thank you for your warning. My questions are indeed because Everyone involved is domiciled in europe and I need ammunition to KEEP the whole thing here. The heir threatens to take the probate to US: children cannot be disinherited completely in Europe, no matter what the will sais. So of course I want to have reason enough for the heir to step back from taking probate in US. Which they will, if chances are that they loose more to taxes than to the children.

Posted

Wait a minute here. You are going to raise these issues in a will contest and possibly expose this family to criminal tax fraud, civil tax fraud and other tax liabilities. You better be careful here. Get with a tax and estates attorney, one who knows about international tax law before your start threatening or extorting (?) money from this family.

Hope this helps.

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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, his email address is sjfpc@comcast.net , for more tax, estate and business articles visit his website www.sjfpc.com. and blog

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.

Asker

Posted

No, no, you got me wrong there! The heir and I are talking OUTSIDE of court. She is aware that there is one sixth of the assets to pay for the children according to european law, and she sais that she will pay something but if we ask too much, she'll take it to court. Problem is, she is lying about the amount of money in the bank. ( we have proof, also for the tax evasion). I want my "real" sixth. I believe if I can make clear to her that everything will come out in court and that would be much more expensive, she would readily give in to my sixth. Thats why I wAnted to know whether taxes are looked into AUTOMATICALLY. I definitely don't want to arson her - I just want to inform her of the technical facts to persuade her to NOT go to court.

James P. Frederick

James P. Frederick

Posted

Taxes would not be "automatically" looked into. But if someone raises these issues then it is probably something they would look at. If the money is all overseas, though, I am not sure the IRS is going to have a claim on it. And in most cases, they will not go back more than six years.

Asker

Posted

Thank you VERY much. That's just what I wanted to know. You war very helpful, I appreciate it!

Asker

Posted

were. (that was supposed to read)

James P. Frederick

James P. Frederick

Posted

You are most welcome!

Posted

Definitely talk to an attorney first. This sounds a little weird at best.

Christopher Larson

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