(IRS could collect estate tax via estate tax lien more than 12 years after taxes assessed; decedent died in 2000 owning assets via revocable trust of approximately $4.57 million and IRA worth $3.85 million; estate tax determined to be approximately $2.47 million; four years of extensions granted via I.R.C. Sec. 616 due to market value decline of publicly traded securities; $200,000 of estate tax paid and insufficient assets in trust to pay balance; IRS sought payment of tax from transferee of IRA under I.R.C. Sec. 6324 estate tax lien; IRS not bound by four year assessment period of I.R.C. Secs. 6501 and 6901(c) and could proceed under I.R.C. Sec. 6324 (10-year provision); 10-year provision extended by four year extension period that had previously been granted to estate, and IRA transferee liability was derivative of estate's liability; immaterial that transferee may have not known of unpaid estate tax; amounts withdrawn from IRA to pay estate tax liability also subject to income tax in transferee's hands; while income tax deduction for estate taxes attributable to IRA available under I.R.C. Sec. 691(c), deduction could be limited due to failure to match tax year of deduction and income).
United States v. Mangiardi, No. 13-80256-CIV-MARRA, 2013 U.S. Dist. LEXIS 10212 (S.D. Fla. Jul. 22, 2013)
Date of decision:
The Center for Agricultural Law and Taxation does not provide legal advice. Any information provided on this website is not intended to be a substitute for legal services from a competent professional. The Center's work is supported by fee-based seminars and generous private gifts. Any opinions, findings, conclusions or recommendations expressed in the material contained on this website do not necessarily reflect the views of Iowa State University.