E285 How Professional Executors Manage Tax Clearance Delays

<p>Every executor faces the tax risks unless they get proper <a href= "https://anthonyspark.com/e257-how-irs-processing-delays-are-slowing-down-probate/"> tax clearance, which can take a LONG time</a>. Here’s how we’ve seen that plays out with professional executors, non-estate attorneys, and amateur executors.</p> <h2>Professional executors set patient expectations</h2> <p><img class="aligncenter size-medium wp-image-42785" src= "https://anthonyspark.com/wp-content/uploads/2022/09/Professional-executors-set-patient-expectations-300x169.jpg" alt="Professional executors set patient expectations" width="300" height="169" /></p> <p>We advise heirs from the beginning that this will be a long process! This probably turned away many prospective clients who thought I was crazy for saying it could take years and decided to go with an attorney who told them it would take only months. (I’m pretty sure it ends up taking years for those attorneys, too). I’d rather be warned that it could take years, than to expect the over-promised and under-delivered “few months”.</p> <p>We keep reminding our clients over the months that it is a long process. People don’t want to hear it, but at least they’re not wondering what’s going on.</p> <p>An example of how long things can take: We filed an application for tax clearance for Mr. M.’s estate in September 2020. The IRS just responded via a computer-generated letter in July 2022 (almost 2 years later!). The IRS hasn’t even granted the tax clearance yet; the letter just acknowledged that they received our application.</p> <p>This is why we set up the expectations in the beginning, because there’s nothing we can do about the government.</p> <h2>General attorneys react</h2> <p><img class="aligncenter size-medium wp-image-42786" src= "https://anthonyspark.com/wp-content/uploads/2022/09/General-attorneys-react-300x169.jpg" alt="General attorneys react" width="300" height="169" /></p> <p>General attorneys can be very reactive if they have not had experience in this area. Many potential clients