IRS is demanding additional money from deceased father's estate - help needed!

This situation isn't uncommon, but can definitely be stressful. The IRS letter mentioning Form 706 (Estate Tax Return) is interesting because as you noted, this form is only required for estates exceeding the federal exemption amount (currently $12.92 million). What you're probably dealing with is unreported income on your father's final 1040 return or possibly Form 1041 (Income Tax Return for Estates and Trusts). The IRS may have received 1099 forms showing income that wasn't included on the final tax return. This could be from interest, dividends, or perhaps a retirement account distribution. Before hiring an attorney, I would suggest: 1) Carefully review the notice to identify exactly what income they're claiming was unreported 2) Request your father's wage and income transcript from the IRS (shows all reported income) 3) Compare this with what was filed on the final return You can also call the IRS at the number on the notice and request clarification. You have the right to appeal or contest the assessment if you believe it's incorrect.

I went through something similar last year with my mother's estate. After spending HOURS trying to reach someone at the IRS with no luck, I finally used https://taxr.ai to analyze the notice and all the documentation I had. Their AI helped identify that the IRS was looking for income from a small life insurance policy that had accumulated interest. The tool was super helpful because it spotted discrepancies between what the IRS was claiming and what we actually had documentation for. It generated a detailed response letter for us explaining why the assessment was incorrect and cited the relevant tax code. Three weeks later we got a notice that the issue was resolved!

I just wanted to update that I used taxr.ai after seeing it mentioned here. My situation wasn't exactly the same as the OP, but I had a CP2000 notice claiming I owed an additional $4,300 in taxes. The service analyzed my documents and the IRS notice, and found that the IRS had double-counted some income from a 1099-R. The response letter it created was really professional - it even cited specific IRS regulations that supported my case. I submitted it last month, and just got confirmation yesterday that the IRS agreed with my explanation and removed the additional assessment completely! Would never have figured this out on my own.

For those struggling to actually get through to someone at the IRS - I was in the same boat trying to resolve an estate issue for my brother. After trying for WEEKS to speak to a human being (getting disconnected or waiting on hold for hours), I found https://claimyr.com through a friend's recommendation. You can see how it works here: https://youtu.be/_kiP6q8DX5c They basically hold your place in the IRS phone queue and call you when they have an agent on the line. Saved me literally hours of hold time, and I finally got to speak to someone who could actually explain what was happening with the estate tax issue. Changed everything for us.

I have to admit I was completely wrong about Claimyr. After posting my skeptical comment, I decided to try it myself since I had a complex tax issue that needed resolving. I was expecting it to be a scam, but it actually worked exactly as advertised. Got a call back in about 50 minutes (way faster than the 2+ hours I'd been waiting on my previous attempts), and was immediately connected to an IRS representative who helped resolve my issue. I had been trying for THREE WEEKS to get through on my own with no success. Wish I had known about this service years ago - would have saved me so much frustration and wasted time.

For the OP - one possibility that no one has mentioned is that the IRS might be identifying income from accounts your dad had that you weren't aware of. My grandmother passed away a few years ago and we discovered she had a small brokerage account that none of us knew about. The 30-day timeline is important, but not as scary as it sounds. You can request an extension to respond (usually 30 more days) by calling the number on the notice. That should give you time to get the wage and income transcript mentioned earlier and figure out what's actually going on.

When my dad passed away, we had a similar issue with the IRS claiming unreported income. In our case, it was because a retirement account distribution had been reported under the estate's EIN (Employer Identification Number) rather than my dad's SSN. The financial institution had filed the 1099-R incorrectly. Check if any financial institutions might have filed information returns using an EIN instead of your dad's social security number. This creates a mismatch in the IRS system and can trigger these kinds of notices.