Principled Man Posted February 10 Posted February 10 For the past 14 years, my 84-year old mother has not been filing a tax return. She receives social security and monthy payments from my father’s pension (he died in January 2011). Unfortunately, I was not in the loop about this until recently. We have now learned that she should have been filing a tax return all these years, AND that she has not had taxes taken out of the pension payments. Would consulting a tax attorney be the best strategy? I’ll definitely be going through Ma’s financial records….assuming I can find them. They’re packed away somewhere…..D’OH!
pjbear05 Posted February 11 Posted February 11 Absolutely. Would probably do to have her estate executor designate power of attorney to whoever handles filing the returns. 3
lerxt1990 Posted February 11 Posted February 11 4 hours ago, Principled Man said: For the past 14 years, my 84-year old mother has not been filing a tax return. She receives social security and monthy payments from my father’s pension (he died in January 2011). Unfortunately, I was not in the loop about this until recently. We have now learned that she should have been filing a tax return all these years, AND that she has not had taxes taken out of the pension payments. Would consulting a tax attorney be the best strategy? I’ll definitely be going through Ma’s financial records….assuming I can find them. They’re packed away somewhere…..D’OH! Yes. Absolutely. This happens.. and they will know exactly what to do, including making arrangement if back taxes or penalties are due. The records at this point may also be available electronically. 2
lerxt1990 Posted February 11 Posted February 11 21 minutes ago, pjbear05 said: Absolutely. Would probably do to have her estate executor designate power of attorney to whoever handles filing the returns. This would help a lot if doable, seconded. 1
lerxt1990 Posted February 11 Posted February 11 (edited) 50 minutes ago, lerxt1990 said: Yes. Absolutely. This happens.. and they will know exactly what to do, including making arrangement if back taxes or penalties are due. The records at this point may also be available electronically. Definitely address the Power of Attorney (medical, financial, living will etc.) concept with the tax attorney or an estate attorney. That can help prevent future problems. Helps if you have any siblings and you all get along work with them too. As they will tell you, be judicious with PoA vs. being a beneficiary sometimes those things get inter-tangled. Edited February 11 by lerxt1990
Principled Man Posted February 11 Author Posted February 11 1 hour ago, pjbear05 said: Absolutely. Would probably do to have her estate executor designate power of attorney to whoever handles filing the returns. I have the POA, and the house is in a family trust. When Ma passes away, the trust goes to me. I freely admit that I should have involved myself in Ma’s taxes years ago. I accepted Ma’s word that she didn’t have to file a return. That was a mistake on my part. Time to comb the house for all those records! Not exactly a treasure hunt! 1 1
lerxt1990 Posted February 11 Posted February 11 Just now, Principled Man said: I have the POA, and the house is in a family trust. When Ma passes away, the trust goes to me. I freely admit that I should have involved myself in Ma’s taxes years ago. I accepted Ma’s word that she didn’t have to file a return. That was a mistake on my part. Time to comb the house for all those records! Not exactly a treasure hunt! Oh ok great. Kind of reverse treasure hunt! lol 1
blueschica Posted February 11 Posted February 11 2 hours ago, Principled Man said: I have the POA, and the house is in a family trust. When Ma passes away, the trust goes to me. I freely admit that I should have involved myself in Ma’s taxes years ago. I accepted Ma’s word that she didn’t have to file a return. That was a mistake on my part. Time to comb the house for all those records! Not exactly a treasure hunt! God Bless ya! Hope your mom's ankle is healing and that both of you are doing well, that's a lot to deal with. 1
HemiBeers Posted February 11 Posted February 11 (edited) Depends on how much she made. I do my mother in laws taxes and she makes about 36k a year in social security. Hasn't paid a cent in taxes for years. But we still file the forms just as a formality. Yes I would get a tax attorney's advice on this. But my thought is that it may be best to not file at this point. Unless she's made quite a bit, the amount of taxes may be miniscule. For lower income individuals, it's a fact that the IRS does not audit them as much because there's not much to be gained for them. Not to be mean or harsh, the IRS may also have assumed that she passed. So there's multiple situations built into IRS's algorithm of why they haven't followed up with her. If you're responsible for settling the estate, I think tax responsibility only applies to her final year. But get the tax attorney's qualified opinion on this. With the anti-government teardown taking place, there will likely be less irs audits in the future as well. The convicted felon in the white house had his situation go away on it's own, so your mom's situation may go away on it's own. But yes get as many forms together and see what the damage would be before filing. The last 3 years would be secret to tell if she even owed anything. Edited February 11 by HemiBeers 1
HemiBeers Posted February 11 Posted February 11 Here's a link. A very common situation with the elderly and their children. https://www.agingcare.com/questions/father-has-not-paid-taxes-in-several-years-is-there-anything-i-can-do-for-him-465019.htm 1
Principled Man Posted February 11 Author Posted February 11 (edited) 8 hours ago, blueschica said: God Bless ya! Hope your mom's ankle is healing and that both of you are doing well, that's a lot to deal with. Thanks, blues! Mom’s ankle is healing slowly but surely. She’s in a walking boot now, but she has a long way to go before she can walk freely again. The biggest challenge is the 24/7 care I’m giving her at home. We have some in-home care twice a week for physical therapy and nursing, but I do everything else around the clock. It was rough at first, but we’ve adapted quite well. The future looks bright. Edited February 11 by Principled Man 3
blueschica Posted February 12 Posted February 12 14 hours ago, Principled Man said: Thanks, blues! Mom’s ankle is healing slowly but surely. She’s in a walking boot now, but she has a long way to go before she can walk freely again. The biggest challenge is the 24/7 care I’m giving her at home. We have some in-home care twice a week for physical therapy and nursing, but I do everything else around the clock. It was rough at first, but we’ve adapted quite well. The future looks bright. Glad to hear it! Hope Mom continues healing well! 2
treeduck Posted February 12 Posted February 12 3 hours ago, blueschica said: Glad to hear it! Hope Mom continues healing well! 1
lerxt1990 Posted February 12 Posted February 12 Something PM mentioned above that I did as well for those that haven't, think very seriously of setting up a trust for the elders that may have some of their assets and their home in it to protect it from being liquidated for elder care/nursing late in life. It's obviously a very personal thing and up to the elder and their wishes, but by using a trust, you can protect that money and assets for the future or even judiciously for THEIR use and an earlier entrance to medicaid and other things if the assets are in a trust. This (of course) works better when said person and children are all in agreement. There is a 5 year lookback usually - so if you are thinking of doing it, better to explore earlier than later. Just wanted to call that out - I found out about this by overhearing a conversation years ago, by accident basically, and it wound up being a very useful thing. 3
HemiBeers Posted February 12 Posted February 12 (edited) 1 hour ago, lerxt1990 said: Something PM mentioned above that I did as well for those that haven't, think very seriously of setting up a trust for the elders that may have some of their assets and their home in it to protect it from being liquidated for elder care/nursing late in life. It's obviously a very personal thing and up to the elder and their wishes, but by using a trust, you can protect that money and assets for the future or even judiciously for THEIR use and an earlier entrance to medicaid and other things if the assets are in a trust. This (of course) works better when said person and children are all in agreement. There is a 5 year lookback usually - so if you are thinking of doing it, better to explore earlier than later. Just wanted to call that out - I found out about this by overhearing a conversation years ago, by accident basically, and it wound up being a very useful thing. Careful how you do this. I went through this with my parents. The gubment can still treat the trust assets as the elders for purposes of applying for medicaid, depending on how the trust is set up. Certain assets are exempt, such as the primary house and the elders car (which is ironic since many elders can't drive if they're at the point of needed a nursing home). Best to use an elder law attorney to set this up. Look back period used to be 7 years but I guess they've changed that since I dealt with it. I always thought it would be fun to exploit the car loophole by liquidating all assets and buying the most expensive car. Grandma would look sweet in her vintage 64 vette. Edited February 12 by HemiBeers 2 1
grep Posted February 12 Posted February 12 Yeah, everything I've heard is a 7 year lookback for multiple states.
BastillePark Posted February 12 Posted February 12 (edited) At this point, I'd just hold off for now. An email was sent out today that talked about reducing the government workforce (except public safety and immigration enforcement) by about 75%. Since that includes the IRS, chances are it would be years before they ever got around to your issue, if ever. Edited February 12 by BastillePark 2
lerxt1990 Posted February 12 Posted February 12 4 hours ago, HemiBeers said: Careful how you do this. I went through this with my parents. The gubment can still treat the trust assets as the elders for purposes of applying for medicaid, depending on how the trust is set up. Certain assets are exempt, such as the primary house and the elders car (which is ironic since many elders can't drive if they're at the point of needed a nursing home). Best to use an elder law attorney to set this up. Look back period used to be 7 years but I guess they've changed that since I dealt with it. I always thought it would be fun to exploit the car loophole by liquidating all assets and buying the most expensive car. Grandma would look sweet in her vintage 64 vette. If you do this with a reputable trust lawyer there shouldn't be any problem, but caution definitely warranted yes. The primary house can be put on the trust, by the way. Again maybe that changed over time from when you did it. But as you say, get a trust attorney that specializes in elder issues. My ma would look stunning in a Ferrari now that you say that... lol! 1
HemiBeers Posted February 12 Posted February 12 9 minutes ago, lerxt1990 said: If you do this with a reputable trust lawyer there shouldn't be any problem, but caution definitely warranted yes. The primary house can be put on the trust, by the way. Again maybe that changed over time from when you did it. But as you say, get a trust attorney that specializes in elder issues. My ma would look stunning in a Ferrari now that you say that... lol! take a picture of her in the seat and then take away the keys. 1
lerxt1990 Posted February 12 Posted February 12 3 minutes ago, HemiBeers said: take a picture of her in the seat and then take away the keys. This idea is getting better and better... HAHAHAHAHAA!!!!! 1
lerxt1990 Posted February 13 Posted February 13 11 hours ago, grep said: Yeah, everything I've heard is a 7 year lookback for multiple states. In PA its 5 years....
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