E239 Why Does Probate Tax Clearance Take So Long?

<p>Waiting for <a href= "https://anthonyspark.com/e155-why-does-probate-take-so-long-tax-clearance/"> tax clearance</a> is often the biggest delay in closing an estate. We’ll explain why tax clearance is so important and why it takes so long.</p> <h2>Why tax clearance is so important</h2> <p><img class="aligncenter size-medium wp-image-11122" src= "https://anthonyspark.com/wp-content/uploads/2021/10/Why-tax-clearance-is-so-important-300x169.jpg" alt="Why tax clearance is so important" width="300" height= "169" /></p> <p>No one wants IRS problems under any circumstances. In estates, the IRS is a top priority creditor. They need to get paid before anyone else gets paid. It’s important to know the final figures for the IRS before distributing to the other creditors and heirs.</p> <p>If the IRS is not paid properly, the IRS will come after the executor and heirs later. In order to be paid, they will come after whoever has the money, which can include the heirs who received an incorrect distribution. The executor can also be held personally liable.</p> <p>Let’s say you are the executor, and you neglect to pay the taxes properly. You cut the checks to the heirs and six months later the IRS says you owe another $50,000. Imagine asking heirs to give back some money to pay taxes. Those heirs are not going to return your phone calls no matter the amount of money owed.</p> <h2>Must file final returns to get started</h2> <p><img class="aligncenter size-medium wp-image-11123" src= "https://anthonyspark.com/wp-content/uploads/2021/10/Must-file-final-returns-to-get-started-300x169.jpg" alt="Must file final returns to get started" width="300" height= "169" /></p> <p>Sometimes it is hard to get the decedent's final paperwork in order to make that final filing. It’s happened to us many times. We know there’s another W-2 or 1099 out there to finalize the return, but we don’t have them. If we’re missing documents, we have to request them from banks and other financial institutions. This process can take weeks, or even months, becaus