Death may not end tax liability

By Johnny Jackson


As the 2007 tax filing extension deadline approaches, officials with the Internal Revenue Service (IRS) are reminding taxpayers that tax liability does not end with death.

This year, the IRS is expecting that there could be thousands of Georgians - some representing the recently deceased - who will not claim their 2005 tax year refunds.

This past year, roughly 44,000 Georgians did not claim their part of the collective $38 million in 2004 tax year refunds. The result was that those refunds, which must be filed and claimed within three years, were returned to the U. S. Treasury, said IRS spokesman Mark Green.

"A portion of that included money for [deceased] individuals who were due a refund or credit, but did not have people file their final return," Green said. "A lot of times a person thinks that when a person dies, that's it. But a final return should be done in order to finalize any kind of tax obligation that the deceased may still have."

This year, for instance, refunds and stimulus payments have been issued in the name of several deceased individuals who were owed money or qualified for the stimulus payments based on their 2007 income tax return.

"Yes, we are sending out money to people who have passed away," Green said. "The logic is that it is your money [deceased or alive]." A person's tax obligation does not end the year of their death, because a taxpayer could either owe or be owed taxes for the time that person paid into the system.

Green said the money typically goes into an account designated by the individual on the return, including circumstances in which a person has died after filing a return, or in which the final 2007 income tax return was filed by a personal representative or surviving spouse. "The bottom line is if you are qualified to receive a credit, a refund, or, in this case, a stimulus payment during the year that you died, then your legal representative can file on your behalf." Such payments, he added, would go toward the deceased individual's estate, by court order, or whatever is stipulated in the deceased individual's will.

In some cases, however, the neither refunds nor stimulus payments have made it to the taxpayer or the taxpayer's legal representative due to a changed address.

"Some people file returns and move away," Green said. "The tax return is processed, but we don't know where to deliver the check. The person just didn't give us a change of address. We run across that every year."

To learn more about filing, visit the IRS web site.


On the net:

Internal Revenue Service: www.irs.gov