Follow
Share

He received money in 2014 from a pension fund. Spent it all. Had two strokes early this year and is under hospice and suffering from dementia. He is 95. We received a letter from IRS stating he needs to file/pay taxes. I am his assigned representative under SOCIAL SECURITY to handle his finances. What should I do?

This question has been closed for answers. Ask a New Question.
Yes, if he owes taxes, he has to file them. This is not your issue, of course, it's his. If I ere you, I would call the IRS, or send them a letter in response to theirs and find out how you should proceed. If your dad has money, or you do, then I wold go to a professional and let a pro sort it out. You have enough on your plate.
Helpful Answer (2)
Report

Whether he has to file depends on whether or not he has taxable income for that tax year. And that would depend on his other income besides the pension.

I haven't dealt with pension issues for decades but believe there still are some specific regulations dealing with various types of pensions that are taken in full in one tax year. Google IRS pension regulations if you want to get an idea what the issues are.

I would also send a letter, certified, just to start the document trail, advising of your father's mental and physical condition, and asking if it can provide more detail. You'll need that especially if he has filed in the past and you haven't seen his tax returns, and especially if you don't know where his financial papers are kept.

If you run into problems, call the IRS Ombudsperson; it's that office's mission to cut through the red tape and help taxpayers solve problems. Or you can hire a tax accountant with experience in representing clients with the IRS - there's a specific designation for that but I can't recall it at this moment. This might turn out to be a situation in which you'll need qualified help and negotiation with the IRS, particularly given your father's current condition (i.e., being in hospice.)

If the IRS is owed funds, it does have authority to garnish/attach liens to assets, so I would think very seriously about having someone like an experienced accountant get involved.
Helpful Answer (2)
Report

NYDIL, just a clarification...everyone doesn't need to file if there is no tax due. I followed IRS 1040 instructions to the letter on this; since I have no tax obligation, I don't need to file, so I save the time of filling out forms and sending them in since I have no tax liability or obligations.
Helpful Answer (1)
Report

NYDIL, I double and triple checked to make sure that I wouldn't deal with anyone's wrath if I didn't file. This is from the 1040 instructions that addresses and identifies filing responsibility:

https://www.irs.gov/instructions/i1040gi/ar01.html#d0e386

"Do You Have To File?

"Use Chart A, B, or C to see if you must file a return. U.S. citizens who lived in or had income from a U.S. possession should see Pub. 570. Residents of Puerto Rico can use TeleTax topic 901 to see if they must file. "

By the time I take the standard elder deduction and the personal exemption, I'm down below the filing limit. And I have no refunds coming, so there's no need to file, unless and/or until I can get a job for an old lady and then will have maybe a few dollars of income to report.
Helpful Answer (1)
Report

NYDIL, I also don't have to file any longer. There is a minimum amount of earned money you need to make in order for you to be required to file a 1040. Once I retired, all I have to live on is social security and it's not a fabulous amount like our legislators like to think we seniors are living on. Once you take the required deductions, I am below the filing level and don't need to file either. If it's confusing to read the instructions, either use a tax software or take it to a tax preparer accountant. They will help you. GardenArtist, if you think they really did make a mistake by cutting the refund by 90%, have you tried filing an amended tax return for that year and try to get the money back? You are correct in your belief that the IRS will go to great lengths to argue when they believe someone has died even though they don't have a death certificate. I think with all the millions of returns they have to deal with, when someone dies with the same name, it does get confusing. There have been stories about people actually walking into an IRS office to show them that they are indeed alive and they still argue with them! You may need the help of an accountant or attorney to get his refund back but I would certainly try.
Helpful Answer (1)
Report

And BTW, the ZZZZZZs also come easily with some of the more complicated publications, such as the trust filing instructions or some of the ones on computing certain investment assets.
Helpful Answer (0)
Report

Rainmom, both the IRS and the Michigan Treasurer's office have done strange things in the past few years. I think I wrote elsewhere that the IRS sent Dad a letter advising he could not receive the refund due him because he didn't file the form necessary to receive funds for a deceased person.

It was news to us that he had somehow died, we both thought he was alive, yet someone at the IRS made such a brilliant determination without any foundation in fact. Even more perplexing is how they expected him as a deceased person to file the form for himself. Unbelievable!

The Michigan Treasury claimed it never received required attachments (the extra postage shown on the certified receipt reflects that their claim of only receiving a 1040 couldn't possibly be accurate). So they cut Dad's refund by about 90%.

Although I hate it, I've gotten used to the fact that one or the other is going to screw up every year and I'll have to put in extra work to get what Dad's due.
Helpful Answer (0)
Report

Find a tax attorney or an accountant that does tons of federal income tax returns. Your issues reflect possible bungling by the IRS and the state government. The chances of sorting through yourself and having decided in your favor is risky. So find someone effective at dealing with bureaucrats.
Helpful Answer (0)
Report

Lol, GardenArtist! That's the IRS for you! Only a government agency would deem it reasonable for a dead person to file a tax return.
Helpful Answer (0)
Report

Terry, it was the Michigan Treasury office that cut Dad's refund, and yes, filing an amendment is the way to go to correct THEIR mistakes. I did file their instructions for an appeal but they ignored it and did nothing, so I'll file an amended return.

It was the IRS that decided Dad had died.

Thanks for the concern and the suggestions.
Helpful Answer (0)
Report

See All Answers
This question has been closed for answers. Ask a New Question.
Ask a Question
Subscribe to
Our Newsletter