Tax Steps to Take Before I Die
Question:
I have not paid any of my federal, state, personal, or business taxes in the last 10 years. What happens if I die first? Should I deal with these taxes before I die?
Deal with my Taxes Before I Die, IRS Tax Attorney (Naperville IL)
This is a complex question. There is no easy answer. Instead, this provides some questions to help plan your next steps. Just a few of the many concerns include:
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What are you actually trying to accomplish? If this question has been pending now for 10 years, what are you (or were you) hoping to be the ending result?
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Have you prepared and filed any of those 10 years of tax returns? Are any of those businesses still active? What kind of “business taxes” are you referring to? Be aware that failure to file returns can be a criminal violation under 26 USC Sec 7203.
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Has either the IRS or your state government contacted you? Has any government begun a process to collect from you? How much would the government collect from you now, if you take no further steps? This matters because if so, the IRS will direct your next steps (unless you have experienced representation).
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Your mention of “before I die” suggests that you contemplate your death. The details behind that contemplation may dictate what steps to take, and when, why, and how. For example, do you have fatal or terminal medical issues? Do you have the resources to finance reasonable living expenses, including medical care? Maybe you permanently qualify for hardship relief.
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Do you have asset inheritances planned for future heirs? Keep in mind that the taxes might be attached to those assets by a Federal or State Tax Lien.