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I am an Executor for my ex-husband Estate (he passed away).

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I am an Executor...

I am an Executor for my ex-husband Estate (he passed away). His bank account has a little more than $100K that will be transferred into his Estate bank account. He also has IRS debts that is $100K (lien is recorded in the County he lived in). Question: will IRS wipe out $100K as soon as his Estate account will show such amount of money? 2d question: is there a way to lessen the debt of the deceased?

Accountant's Assistant: Since estate law varies from place to place, can you tell me what state this is in?

Virginia

Accountant's Assistant: What documents or supporting evidence do you have?

Tax returns... maybe they were filed wrong...

Accountant's Assistant: Anything else you want the lawyer to know before I connect you?

Should we sell his real property knowing that proceeds will go to IRS first or should we let IRS collect the debt from the estate?

Submitted: 4 months ago.Category: Tax
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3/23/2018
Tax Professional: Lev, Tax Advisor replied 4 months ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 33,141
Experience: Taxes, Immigration, Labor Relations
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Question: will IRS wipe out $100K as soon as his Estate account will show such amount of money?

We need to consider how the bank levy works...

When the levy is on a bank account, the Internal Revenue Code (IRC) provides a 21-day waiting period for complying with the levy. The waiting period is intended to allow you time to contact the IRS and arrange to pay the tax or notify the IRS of errors in the levy.

So there should be an intention to levy notice first with the amount to be levied.

All funds up to that amount will be on hold for 21 days - and after that period the bank will have to send that amount to the IRS.

We may not know if the IRS will have any information about that account and when they levy.

2d question: is there a way to lessen the debt of the deceased?

That is possible if you as an executor will negotiate with the IRS.

The estate may negotiate the same way as individuals.

You may want to review tax returns of teh deceased and make corrections.

Should we sell his real property knowing that proceeds will go to IRS first or should we let IRS collect the debt from the estate?

If there is no tax lien against real estate - you may sell - no issues.

Or you may want to distribute assets in-kind without selling - so beneficiaries will sell later if needed.

.

Let me know if any clarification needed.

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Tax Professional: Lev, Tax Advisor replied 3 months ago

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