Confusion in Filing Estate Tax Returns
In October 2015 a Federal Judge in Virginia
upheld interest and penalties against an estate for the estate’s failure to
timely file an estate tax return.
This case shows the importance of avoiding
confusion over who is responsible for timely filing an estate tax return. It’s
vital for the estate’s representative to be pro-active in hiring a professional
to complete the return and get it timely filed. When there is more than one
professional involved in providing advice or assistance to the estate’s representative
or if no representative has been appointed, confusion can arise.
Many estate planning attorneys do not get
involved in preparing and filing such tax returns, relying on accountants to
complete this work. Some accountants may presume that the estate planning attorney
is handling that work, when in reality, the attorney is not retained or been
directed to do such work.
The key is this: If the estate has an
appointed personal representative, that representative must clearly direct
whose to do this work. If there’s no appointed personal representative, then
the beneficiaries of the estate must step up to the plate and get the return
timely filed. In this federal case of West v. Koskinen, Comm’rin the Eastern District of Virginia (2015), the estate had to pay $335,636.76
in penalties and interest when the tax return was filed late.
November 10, 2015
Here’s a tidbit for
those of you who prepare your own documents that need to be notarized.
After July 1, 2008
notarized documents must have the notarial certificate wording (“Appeared
before me, John Smith…”) on the same page as the signature of the person
signing the document. Documents not containing both signature and notary
certificate on the same page are not deemed to be validly notarized in
Virginia. (Reference Virginia Code Section 47.1-15)
October 6, 2015