[cariver]

Ok here's a complex one. Father in law died early this year from long about with cancer. Had essentially no estate, except cash, daughter was on checking account as joint owner. Daughter moved out most all money from his checking 2 months before he passed, since she was joint owner. She paid off all bills. He was on social security and a stipend pension. Today she gets notice from IRS father had not filed eturns since 2004 when diagnosed with cancer (guess he didn't care). Now daughter is worried she will be liable for taxes. Can IRS hold her responsible for the unpaid taxes and penalties?? No will, no probate. And would never let her in his tax business. Don't have any doc's tio file and now just a big assessment. I know I need to talk to a professional. Just trying to get informed here.

[AtlantaTaxExpert]

Okay, even though you were a joint owner of the checking account, the source of the money was your father, so that checking account IS his estate. As long as you used the money to pay HIS bills, there should be no problem.

Yes, you definitely need the help of a competent tax professional. Try to find one who has experience with BOTH income taxes and the tax issues associated with an estate. For sure, an enrolled agent will have the necessary qualifications, and they are cheaper than a CPA.

You need to track down his tax documents (W-2s, 1099s from banks and brokerage firms, etc.) from his papers. If you can find nothing, then you need to contact the IRS to start the process to have them designate you as your father's estate representative. Once that is done, you should request a copy of his tax tyranscripts for each year in which a tax return is due.

Once you have those transcripts, any competent tax professional can produce tax returns using the tax transcripts. Note that assessment tax returns prepared by the IRS are done in a way that produces the MOST taxes. A properly-prepared return may show him to owe little, if any, taxes.

Once the returns are prepared, if money is owed, you should use the rest of the estate money to pay the taxes. If there is not enough money available to pay the taxes, you need to formally state that fact in a cover letter with the filed tax returns.

Once the returns are filed and the tax bill is either settled or you formally declare the estate funds to be depleted, the IRS will probably NOT hold you responsible for the remaining tax bills.