In today’s cautionary tale, Forbes published an article this week describing a case requesting $1.2 million refund on a bill from the IRS for penalties and interest resulting from the executor’s failure to file an estate tax return and pay taxes on time.
The facts are messy, complicated and probably unique: there are really not all that many estate planning attorneys struggling with brain cancer, inexperienced executors who would repeatedly ignore notices from the probate court for missed deadlines, executors who would consistently defer to an attorney who repeatedly fails to follow through, families who then squabble over how to allocate the tax liability and then try to get the executor removed. And all of this for an estate worth $12 million.
But still, the larger point is that, ultimately, it is the executor who is legally responsible for filing taxes that are due. The burden on the side requesting the refund is to show that the failure to file the tax return properly was due to reasonable cause and not willful neglect. To put that in more common, parental terms: it doesn’t matter if you have a really good excuse, or that you have never done this job before, or if someone else told you that they were going to do it–in the end, it’s up to you to see that the job gets done. Period.
To quote the Forbes article, “So what if you’re the executor? The Will spells out your basic duties. Read it.” Honestly, I couldn’t say that any better myself.