Estate of Young v. United States, No. 11-11829-RWZ, 2012 U.S. Dist. LEXIS 178232 (D. Mass. Dec. 17, 2012)

(decedent died on 8/14/08 and estate tax return due on 5/14/09, but estate filed request for extension of time to file and pay tax which was granted and filing deadline extended to 11/14/09 with tax payment due 5/14/10; estate made partial payment of $760,000 on 5/14/09 and second payment of $2,200,000 on 8/31/09 which satisfied balance of estate's tax liability as estimated at time request for extension of time to file made; during summer of 2009, estate's property values plummeted and appraisals believed to exceed FMV of properties at that time; as of 11/14/09, estate could either file timely return with appraised values followed by amended return upon sale of estate properties. or wait until properties sold followed by filing single return; even though first option would result in filing of late return, estate believed that no penalties would result because estate had already paid more than eventual tax liability; return filed on 2/15/10 and IRS assessed late filing penalty of $259,325.85 plus $20,774.30 of interest; court determined that estate lacked reasonable cause for late filing - advice on avoiding audits not reasonable cause; estate had obligation to timely file with best information available at time for filing return; willfull neglect of timely filing present; summary judgment for government granted; note that estate fully paid its estimated tax liability by extended payment deadline, but not by original payment deadline).

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