Tax Question :(

[AC7179]

If anybody has any words of wisdom, I would be ETERNALLY grateful.

My grandmother died in 2003.
For the entire year of 2002, she was in a rest home. The expense was outrageous. Her entire monthly income went to the nursing home. Mom (who had power of attorney) had to cash out some IRAs that all went directly to the nursing home as well. At tax time of that year, Mom went to the library where AARP was helping with taxes for the elderly. Someone advised that she didn't need to file since her entire income was going to the nursing home with social security taking care of the rest.
Apparently that was false information. I wasn't aware of the situation then. I think if I was, I would have been skeptical of the info, but Mom was having a hard time, she has never done her own taxes (Dad took care of it) and I guess she just wasn't as thorough as she should have been.
So Granny died in 2003 and there was nothing left of her money. Granny's checking account had Mom's name on it as well. It had all gone to the nursing home. She did have a 1997 Chevy Beretta that is sitting in Mom's garage right now. She needs to sell it but I don't think she has gotten over Granny's death. I guess sometime last year, Mom got a letter saying that Granny owed $1000 in taxes. Mom called IRS and told them she had died and thought that was the end of it.
They sent her l(granny) letters saying that she had been penalized and charged interest. Mom went to IRS a few months ago and was told that unless she was executor of the estate, they couldn't discuss tax issues with her. Mom said she was power of attorney and they said that died when Granny did. Mom was wanting to pay the original thousand out of her pocket, but they said that she would have to go to lawyer and become executor of the esate to pay it. Mom didn't want to go through the hassle of becoming executor of an estate that didn't exist just so she could take care of this. When she went to the social security to ask them about it, they told her she had no responsiblity over my grandmother's taxes because my grandmother was dead.
So now she got a new letter (adressed to Granny, with dec. after it?, saying that Granny owes $5000 now that penalties and fees. She is totally stressed out over it. She doesn't mind paying the 1000 that was originally owed out of her personal checking but she doesn't have the 5000. She is really scared and stressed. Our next move was going to a lawyer but it is just so expensive for her.
Please don't flame, I know ti wasn't hadnled the way it should have been, but I'm just now getting involved and I am trying to help my mom. Can anyone help with any info?

 

[gallaj0]

First off, I'm sorry for your loss. It must also be painful for both you and your mother for this to drag on like that.

I don't know what state you live in, but if you contact the state Legal bar, they may be able to put you (or more likely your mother) in touch with a lawyer that may do the work pro bono; or at least point you in the right direction.

It sounds as if your Granny didn't leave a will, which would should have put the next of kin in court at some point to determine the executor of the estate. Almost every person has either some amount, in the bank or owed to someone else, when they pass. Unless the balance is exactly $0.00, it means someone has to be put in charge to either disburse the amount left, or pay off the people owed. This also applies to real property like houses, clothes, or cars. That would have indicated there was some need to determine who was in charge of the estate when Granny went to her reward.

 

[AC7179]

thanks for the kind reply.

when granny died she had maybe 1500 in her account that went to paying the nursing home and funeral expenses. i'mnot even sure that that covered all of it.

 

[gallaj0]

Even so, any amount of money, in the bank, in change on the nightstand or owed to a creditor; or anything worth money like clothes, a car, or a home, means there is an estate, and someone needs to take care of it. Everybody, with very few exceptions, has an estate.

 

[AC7179]

Okay. Thanks...we didn't know that meant she had an estate. Sorry for sounding so ignorant. So, since my mom took care of it, does that make her executor automatically, as in she is personally responsible for what is owed to the IRS?

 

[gallaj0]

It's never ignorant to ask questions.

I don't think it means your mother was automaticially made the executor, but I may be wrong on that part. I thiink that is determined in your state's law. your mother should contact the state bar association; they will have either a definate answer, or can put you in touch with someone who can answer it; possibly for a reduced fee, or for free, if cirumstances warrant.

the IRS may even be able to help put you in touch with someone; but this is probable the wrong time of year to get some help from them other than routine tax questions.