Death and Taxes???????

Question

My father died recently, with nothing. His only income was his social security. I've been paying off his medical bills with what he had left and am in the process of trying to sell his car. I am not required to file probate or a final IRS statement, since he had no income (already checked). But I'm afraid his past will come to haunt us, when he left his working life back in 2002, he walked away from a non-profitable business (leaving the contents to his workers, they changed the name) - but he also left with unpaid taxes on the business (payroll taxes, I think). My question is, will these unpaid taxes now become the responsibility of his family now that he is deceased? Is there anything I should do about it?

Answer 1

Unless you are the wife, I don't think you owe anything.  I don't think you have to pay the medical bills or the taxes.  You might want to talk to a financial planner or someone else that would be more knowledgeable about this.  The creditors (like the hospital ) will continue to call you ask for payment, but I don' t think you are legally responsible to pay them.

I heard this Suzie Orman if I remember correctly.  But double check to be sure

Answer 2

In theory, you were to pay the IRS first, not last, with any remaining assets of the estate.

Answer 3

If he has a surviving spouse it may come back to her. You are not responsible for your parents taxes.

Answer 4

AH, any debts your father left, tax or otherwise, would be the liability of his estate, if any, not his family, unless, and this is important, any family members also had an ownership in the business.  So what should you do?  Check to see if you or any family members were ever listed as owners of the business.  Also, you said there was no probate to file, but you also mentioned property he left, a car.  This car, or the proceeds of the sale thereof (I've been waiting years to write "thereof" in a sentence) may be considered part of his estate, and possibly liable to attachment for back taxes.  Ask the attorney you checked with about the probate.  (it was an attorney, wasn't it?)

Edit:  Yeah, like Judy said.

Answer 5

The back taxes are the responsibility of the estate, but not of the family if you weren't involved in the business.  If there's anything in the estate (such as the proceeds of the car) then those should be used toward the taxes rather than distributed to heirs.

Answer 6

The medical bills and back taxes are the liability of the estate.  I suggest you let the IRS sell the car, if he owes back taxes.

Payroll taxes can be be assessed from anyone who could have paid them (basically, anyone who had signature authority at the business), or _their_ heirs or beneficiaries -- it's known as the 100% tax penalty.

However, the family has no liability for back taxes, except as noted above, or except as they received bequests from the estate.