In US v. Kohls, 2020-1 U.S.T.C. ¶60,719, (Jan. 2, 2020), the US District Court for the Southern District of Ohio held that an executor of a decedent’s estate was personally liable for unpaid estate tax after he distributed property to himself and other beneficiaries before paying the estate tax.
The IRS notified the estate that its federal estate tax return was under review regarding a qualified family owned business interest deduction claimed on the return. In the years that the return was under review, the executor represented to the probate court that estate assets could not be distributed due to the IRS review. However, several properties were transferred to the executor and other beneficiaries. Once the review was complete, the executor signed a Form 890, consenting to the immediate assessment and collection of the estate tax deficiency.
Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal.