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My father has dementia. I’ve recently learned that his POA has depleted his IRA. In addition, no taxes have been filed for the last 5 years and now the IRS wants payment for one of those years. Proposed amount: $9,200.00


Apparently in 2014, his POA withdrew $175,000 and $45,000 in tax was withheld.


The folllowing year $140,000was withdrawn and $60,000 was withheld.


Fast forward to 2019 and POA says there’s no money for his care which he now needs.


HELP

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You need a lawyer to verify thefts and to pursue legal remedies. Was this a family member? Good luck at getting to the bottom of this theft.
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Kellywb Feb 20, 2019
What kind of lawyer?
It is my sister with POA.
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My suggestion is to get a CPA to review all his taxes filed in 2011 -2013. If dad doesn’t have them, then he will have to request them from IRS. There’s a IRS DPOA authorization form that has to accompany the request. A good CPA should know how to do this. Those missing years will need to be filed. It will be a beast to do but use old filings for template. You want to clearly speak with the CPA as to doing the 1040 filing so that hopefully also a IRS 982 can be done so it shows insolvency and that $9600 bill zeros out.

As an aside on the 1040/982, for folks that go onto Medicaid in a NH, they end up defaulting on stuff (credit cards, mortgage, car notes) as Medicaid requires a copay of their monthly income. So they have no $ to pay anymore. They get 1099-C for the amount of debt cancelled. They could get several 1099-Cs. And the amount is taxable income. Yeah, phantom income but taxable! The CPA does the 982 to show insolvency and the taxes on the phantom income is zero or become very very reduced. It’s not ever a DIY, or a Turbo Tax project imo.

The non filing started in 2014, right? So you want a few years before to see what his pattern was. You have to deal with IRS for him. They are a supercreditor and actually can attach a portion of his SS income. Really you don’t want to have that ever happen.

If private pay care has been happening and getting paid for, I can see the $ going for it. Hawaii has high cost of care, cost of living. Private pay in home care could run 100k a year in the mainland US. So over 100k in home for Hawaii cpuld make sense. Or was $ squandered?

Is DPOA your sibling? Or another relation? Not a relative?
Why are they dpoa instead of you, his daughter?
Would your dad change POA to you?
Is he kinda competent and cognitive to do so?
If not, can you front $ to get an atty to seek guardianship over him?
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Kellywb Feb 20, 2019
I am in the process of seeking guardianship.
My sister has POA and apparently has not filed taxes since she fired Dad’s (very trusted)CPA in 2012. Now I learn that big chunks were withdrawn from the IRA starting there.
Private care averaged 60K per year but only for 2017 and 2018. Prior to that @ $30K. Pension and SS are $41K per year. Excellent Medicare benefits. No mortgage.
My guess is squandered.
POA has found a way to put him in Hospice. It’s a mess.
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We don't know if sister stole the money. Maybe dad knew what was going on and he spent the money.

Was it required withdrawals? Some retirement accounts actually penalize you if you don't take money at certain intervals.

I would get a CPA involved to know exactly what the situation is before you get law enforcement involved. False allegations ruin lives and we should be very sure before we make any allegations.
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worriedinCali Feb 20, 2019
Well said. I hate when people jump to conclusions here and convict people without any facts. For all anyone here knows, the money was used for his care. If the POS was in effect as far back as 2014, obviously somebody had to have been paying for his care all this time.
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A tax lawyer. This is not something you can figure out yourself. This is grand theft and Sister needs to be prosecuted.
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Kellywb, I would ask if they have an affiliated CPA to audit the account. A good general counsel or an elder attorney. I would make sure it’s an attorney who is aggressive in pursuing the POA and the money.
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