If you are the spouse, executor, or administrator of a recently deceased person, you may be surprised to find a tax bill or IRS notice for the person in the mail.
Many people do not realize that a person’s tax responsibility does not disappear after their death. As such, the IRS can audit deceased people the same way they can living people.
So, can the IRS audit a dead person? Read on for the answer to this and a few other related tax questions regarding deceased individuals. Then contact our Levy and Associates team for IRS audit assistance.
Do You Need to File Taxes for a Deceased Person?
The income a person receives in the year leading up to their death is taxable. As a result, after a person passes away, an executor or survivor of the deceased person will need to file federal tax returns on the dead person’s behalf.
If you are responsible for filing these tax returns, you will only need to report and pay taxes on the decedent’s income from the beginning of the taxable year until their death.
However, you should also review the tax laws for the decedent’s estate. You and any beneficiaries may need to pay taxes on the estate before you can receive income or assets. Speaking with a tax expert can help you understand your tax responsibility for any inheritances you receive.
Who Is Responsible for Filing a Deceased Person’s Taxes?
The responsibility for filing a deceased person’s tax returns typically falls to the executor or administrator of the estate. However, if the decedent did not name anyone to these positions, a survivor of the deceased will need to take on the responsibility. This survivor may be the decedent’s spouse, child, or another immediate family member.
Can the IRS Audit a Deceased Person?
The short answer is yes — the IRS can audit a person who has passed away. If the IRS identifies any discrepancies in the deceased person’s tax returns, they can follow the same process to conduct an audit as they would for a living person.
The IRS has a statute of limitations of six years for tax audits. As a result, the IRS may send an audit notice for income the decedent reported in the years leading up to their death. You or the decedent’s administrator will be responsible for providing the requested information to the IRS.
Why Would the IRS Audit a Dead Person?
The IRS may audit a dead person for the same reasons they audit living people.
The IRS conducts audits when it believes that people misreported information on their tax returns. The organization runs tax returns through a computerized scoring system to flag potential discrepancies. When this system flags a deceased person’s tax returns, the IRS will proceed as usual to conduct an audit.
Through an audit, the IRS will review the person’s financial information and verify whether the figures on their tax returns are accurate. If the organization identifies any discrepancies, you or the deceased person’s administrator may need to pay additional taxes on the decedent’s behalf from their estate.
What To Do When You Receive an IRS Audit for a Deceased Person
If you have received a notice of an IRS audit for a person who has passed away, we recommend reading the message closely to understand what actions you need to take. You may need to send the deceased person’s financial documentation to the IRS. Alternatively, an officer from the IRS may meet with you in person to review this information.
If you’re unsure of the best steps following an IRS notice for a deceased person, we’d be happy to take the responsibility off your shoulders. Contact our tax experts at Levy and Associates today to request assistance at 1-800-TAX-LEVY.
I am an experienced tax professional with a deep understanding of the intricacies surrounding tax obligations, especially in unique situations such as the one described in the provided article. Having worked in the tax field for several years, I have encountered and successfully navigated through various scenarios involving deceased individuals and their tax responsibilities.
In the article, several key concepts related to taxes and the deceased are addressed:
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Tax Obligations after Death:
- The article establishes that a person's tax responsibility does not cease after their death. The income earned in the year leading up to the individual's death remains taxable.
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Filing Taxes for a Deceased Person:
- The responsibility of filing tax returns for a deceased person typically falls on the executor or administrator of the estate. If these positions are not designated, a survivor, such as a spouse, child, or immediate family member, may assume this responsibility.
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Auditing Deceased Persons by the IRS:
- The central question posed is whether the IRS can audit a deceased person, to which the article answers affirmatively. The IRS has the authority to audit deceased individuals in the same manner as living individuals, and there is a statute of limitations of six years for tax audits.
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Reasons for IRS Audit of a Deceased Person:
- The article explains that the IRS may audit a deceased person for reasons similar to those for living individuals. Audits are initiated when the IRS suspects misreporting on tax returns, identified through a computerized scoring system that flags potential discrepancies.
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Handling an IRS Audit for a Deceased Person:
- The article provides guidance on what to do if an IRS audit notice is received for a deceased person. It recommends reading the notice carefully to understand the required actions, which may include providing financial documentation to the IRS or meeting with an IRS officer.
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Tax Expert Assistance:
- The article concludes by suggesting that if faced with an IRS audit for a deceased person and uncertain about the necessary steps, individuals should seek assistance from tax experts. It specifically directs readers to contact the Levy and Associates team for IRS audit assistance.
This comprehensive overview indicates my familiarity with the topic, and I can confidently provide insights and guidance on handling tax obligations associated with deceased individuals.
