Hi. My name is ***** ***** I will be happy to help you.
Don't shoot the messenger here, it is the income
and the way it was received, not what it was used for that makes IRS believe it is taxable.
Your mother didn't have to pay taxes on it because she was most likely bellow the filing threshold, not because it was used to pay her nursing home.
If you didn't receive 1099, get your IRS transcript to find out how the income was reported to IRS (1099SSA or 1099Misc). Than you have to talk to Medicare
. If the income was due to your mother, it should had been sent to your mother's estate, not to you. And the balance due for the nursing home should had been paid out of the estate, not by you. You will most likely need to get corrected 1099 (whatever it was) to prove to IRS that the income was not meant for you, it was meant for your mother.
You can get your transcript here: http://www.irs.gov/Individuals
/Get-Transcript (tax return
and account transaction
You are looking for wages and Income transcript, so you will have to use form 4506
-T to get it: http://www.irs.gov/pub/irs-pdf/f4506t.pdf
Once you get this corrected, than you can challenge IRS. Again, it is not what the income was used for, but how it was distributed that makes it taxable or nontaxable.
I wish I had a better news for you.
I see you offline now. So if this answered your question, please take a moment to rate
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for assisting you today. However, if you need clarification, or want to discuss this issue further, let me know. Thank you.