My deceased mother received an IRS bill for unreported 1099R income - what now?

This is a frustrating but common situation. When someone passes away, their estate becomes responsible for any outstanding tax liabilities. Since all assets were distributed through beneficiary designations (which bypass probate), no formal estate was likely established. What you need is Form 56 "Notice Concerning Fiduciary Relationship" which establishes you as a representative who can deal with the IRS regarding your mother's tax matters. You'll also need a copy of the death certificate. Once the IRS processes Form 56, you can request a "final bill" from the IRS and potentially negotiate the amount owed. If the 1099R income truly wasn't reported, then yes, technically the tax is legitimately owed. However, you might have options to request penalty abatement since this was an accountant's error. The tax itself plus interest will likely still be due.

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Thanks for the taxr.ai recommendation! I finally got resolution on my brother's tax situation. The document analysis showed that since he had no executor appointed and I wasn't a legal representative, I needed to file for limited authority just to resolve the tax issue. What really helped was the explanation of transferee liability - turns out I wasn't personally liable for his tax debt since I didn't receive assets that exceeded the tax liability threshold. The system pointed out specific provisions that the IRS agents never mentioned. Also saved me from making a huge mistake - I was about to pay the bill from my personal account just to make it go away, which would have been considered admitting liability. Instead, I followed their guidance to establish limited fiduciary status first. Seriously, best $$ I've spent dealing with this whole mess.

If you want to speak directly with an IRS agent (which you'll need to do eventually), try Claimyr at https://claimyr.com - I was skeptical but it worked amazingly well. Waited on hold with the IRS for 3+ hours one day and never got through. With Claimyr, they navigated the phone tree, waited on hold, and then called me when an actual human IRS agent was on the line ready to talk. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c For estate/deceased taxpayer issues, you absolutely need to talk to the right department, and this service made that possible instead of being transferred endlessly. The agent I finally spoke with helped me file the correct forms for my late aunt's tax situation (similar to yours).

I need to eat some serious crow here. After dismissing Claimyr as a likely scam, I was desperate enough to try it yesterday for my own IRS issue. I'd been trying to reach someone for WEEKS about my deceased parent's tax situation. It actually worked exactly as described. The system navigated all the phone menus, waited on hold for almost 2 hours (which I didn't have to sit through), then called my phone when a real IRS agent was on the line. I was connected directly to the person, and was able to get my issue resolved in about 20 minutes of actual conversation. For anyone dealing with a deceased taxpayer issue: I learned you need to speak specifically with the "Deceased Taxpayer Department" - something none of the general IRS reps told me in my previous attempts. Once I was connected to the right department, they were actually quite helpful and processed my Form 56 immediately.

Former tax professional here - a few important things to note: 1) Your mother's final tax obligations don't just disappear with her death 2) The IRS can pursue transferees who received assets if tax debts existed at time of transfer 3) Since the assets were transferred via beneficiary designations, this gets complicated The most straightforward solution would be to file Form 56 as others suggested, then arrange payment of the legitimate tax due. You could request abatement of penalties (not interest) through a reasonable cause request explaining the accountant's error. If the total distributed to each child was less than the tax owed, the IRS might accept a partial payment as settlement. But you need proper representation established first.

I had almost the exact situation with my dad last year - missed 1099R and everything! What we did: got death certificate, filled out Form 56, and sent it with a letter explaining the situation. Also included Form 1040X (amended return) showing the correct income. We paid the actual tax owed (couldn't get around that) but requested an abatement of all penalties due to reasonable cause. Took about 3 months but they approved it! Saved us over $2k in penalties.

I'm dealing with a very similar situation right now with my late father's estate. One thing I learned that might help - even though your mom's assets were distributed through beneficiary designations, the IRS can still pursue what's called "transferee liability" against the beneficiaries if there were unpaid taxes at the time of transfer. The key is getting proper authorization to deal with the IRS on her behalf. Form 56 is definitely the right path, but make sure you're sending it to the correct IRS processing center for your state. I made the mistake of sending it to the wrong location initially and it delayed everything by months. Also, document everything with the IRS phone calls - dates, times, agent names/ID numbers. The inconsistent information you're getting is unfortunately typical, but having records helps if you need to escalate later. You might also want to request a manager or supervisor when you call back, as they tend to be more knowledgeable about deceased taxpayer procedures. The $12,300 won't just disappear, but you do have options for penalty abatement and possibly even an offer in compromise if the total distributed assets were less than the tax debt. Don't let the interest and penalties keep accumulating while you're stuck in this bureaucratic maze.

I went through this exact nightmare when my grandmother passed in 2022. The IRS bureaucracy around deceased taxpayers is absolutely maddening, but here's what finally worked: First, you're right that the tax liability doesn't just disappear. Since your mom's assets were distributed through beneficiary designations, you and your siblings could potentially be liable as transferees if the IRS can prove the tax debt existed when you received the assets (which it sounds like it did). The Form 56 route is correct, but here's the key - you need to establish yourself as the "informal fiduciary" since no formal estate was opened. Include a cover letter explaining that all assets were distributed via beneficiary designations and that you're acting on behalf of the deceased taxpayer to resolve outstanding tax matters. Also, when you call the IRS, specifically ask for the "Deceased Taxpayer" unit - don't let them transfer you to general collections. The regular agents literally don't have training on these situations, which explains the ridiculous advice about getting a power of attorney from a dead person. Once you get Form 56 processed, you can request penalty abatement for reasonable cause (accountant error) and potentially set up a payment plan if needed. The actual tax plus interest will likely still be due, but you can eliminate the penalties which are usually a big chunk of these bills. Don't ignore this - the IRS has up to 10 years to collect and can absolutely pursue transferee liability against beneficiaries. Better to deal with it now before more penalties and interest accumulate.