When Someone Dies & Owes Taxes
Who is Responsible & How Taxes are Handled
What Happens to Taxes After Someone Dies?
Sometimes, tax debt dies with the taxpayer, but more often, there are taxes to pay and returns to file after someone dies. To minimize your tax burden and organize finances for your heirs, consider consulting with an estate attorney who can help you plan ahead. A tax attorney can help if you’re dealing with a final return or wondering if you owe taxes after someone’s death.
To get help now, contact us at the W Tax Group. If you have recently suffered a loss, we extend you our condolences.
Key takeaways
- Final income tax return – must be filed if the taxpayer was obligated to file if still alive.
- Estate tax return – as of 2025, required if the estate is worth more than $13.99 million for an individual.
- Who’s responsible for the tax debt – The estate must pay the taxes before distributing the rest of the assets to the heirs.
- Insolvent estates – generally no obligation to pay taxes
- Married filing jointly – the surviving spouse is responsible for the tax due shown on the return.
Income Tax Obligations After the Death of a Taxpayer
After their death, taxpayers face the same rules for their final income tax return as anyone else – if their income is under the threshold, no one needs to file a return, but otherwise, the executor of the estate must file a final return.
If the return shows taxes due or if the taxpayer dies with tax debt, their estate is responsible for their unpaid taxes. If the estate is insolvent, no one has to pay taxes. However, if their tax debt is from a jointly filed return, the surviving spouse is liable.
What About Estate Taxes?
The estate tax is fairly rare. As of 2025, it only applies to estates worth over $13.99 million for an individual. At the time of writing, this threshold is scheduled to fall to $6 million at the end of 2025. Estates over the threshold must file Form 706 (United States Estate (and Generation-Skipping Transfer) Tax Return).
Who Is Responsible for the Tax Debt of a Deceased Person?
The estate is responsible. If the tax debt is from a jointly filed return, the spouse is responsible even if the estate is insolvent.
When someone dies, everything their own becomes part of their estate, and the estate goes through a legal process called probate. Probate is when the courts verify the will (if there is one) and appoint an executor to distribute the deceased person’s assets to their heirs.
Before distributing the assets, the estate must pay all of its debts, including tax debts. Debts usually get paid in this order: secured debts (for instance, mortgages), federal tax debts, state tax debts, and finally, unsecured debts (for instance, credit cards).
Example of an estate paying income tax debt
Imagine Joe dies. He owns several assets, all of which he has left to his children, but he also owes $20,000 in taxes from his final income tax return. The executor uses cash from Joe’s bank accounts and sells some of his investments to pay the tax debt. Then, the remaining assets go to Joe’s children.
What if the estate doesn’t pay the deceased person’s taxes?
If the executor doesn’t file the right returns or pay the decedent’s taxes correctly out of the estate, the IRS can hold them personally responsible for the tax debt. The IRS may use wage garnishments, tax liens, or asset levies to collect the unpaid tax from the executor.
What if the estate is insolvent?
If the estate has more debts than assets, it is insolvent. It must pay any liabilities that it can afford to pay, and any remaining debts are generally not collectible. However, if the decedent’s back taxes are from a joint tax return, the IRS can try to collect the money from the surviving spouse.
To illustrate, say that Mei and Hank filed a joint tax return in 2023. The return shows a balance due of $10,000. In 2025, Mei dies, and her estate is insolvent. The IRS cannot collect the tax debt from the estate, but they can go after Hank. They can even go after Hank if the couple divorced prior to Mei’s death. When a married couple files a joint return, they are both liable for the tax debt.
What if there is no probate?
In many cases, estates don’t have to go through probate. This happens if someone doesn’t have enough qualifying assets or if they’ve used estate planning strategies to avoid going through probate.
If someone uses a trust to avoid probate, the IRS may place a claim against the trust to collect the taxes.
Am I responsible for my late spouse’s tax debt?
You may be responsible for your late spouse’s tax debt if:
- You filed a joint return showing a tax debt due.
- Your late spouse owed taxes on a return filed as married filing separately and you co-own property with them.
- You live in a community property state.
If you believe that you shouldn’t be held responsible for your late spouse’s tax liability, you may want to look into Innocent Spouse Relief. This program allows qualifying applicants to get relief from tax debts due to their late spouses.
However, you must meet very specific criteria to qualify. Generally, that means that you couldn’t know about the tax debt or the events that led to the tax debt, and also, you shouldn’t have had a reason to know. Alternatively, you may qualify if you were coerced or abused into signing the tax return.
How to find out if a decedent owes taxes
Here are step-by-step instructions for executors on how to find out if a deceased taxpayer owes taxes:
- Provide the IRS with authorization – send a copy of the Letters of Testamentary approved by the probate court or file Form 56 (Notice Concerning Fiduciary Relationship) along with a copy of the Testamentary Letters. Include the deceased person’s Social Security Number, their last address, and a copy of their Death Certificate.
- Find out if they owe tax debt – file Form 15107 (Information Request for a Deceased Taxpayer). This form requests basic information about the deceased taxpayer. Then, it asks about the probate information, and it prompts you to list the decedent’s assets whether they went through probate or not.
- Request their tax transcript – Once you’ve established that you have the right to the decedent’s information, you can request a tax transcript online. This shows how much they owe. If you apply for the transcript online, the IRS will mail it to the decedent’s last known address. To get the transcript mailed to you, file Form 4506-T (Request for Transcript of Tax Return).
- Contact the Taxpayer Advocate Service – Alternatively, you can get a payoff amount from the Taxpayer Advocate Service.
- Make a proof for claim – If the decedent owed taxes, send a proof for claim to the IRS. Then, the IRS can send info about the tax debt to the probate court.
What if they have unfiled returns from previous years?
If they have unfiled returns from previous years, the executor should file them. Then, if tax debt is owed, the estate is responsible.
How to file a final return for a deceased person
You can file a joint return with your late spouse, but otherwise, you must be the executor of the estate to file a return on behalf of a deceased taxpayer.
- Determine if they need to file – Generally, if they earned $12,950 or less during the year, you don’t have to file unless they meet one of the other filing requirements such as earning more than $400 in net self-employment income.
- Complete the return – Filing a decedent’s return is about the same as filing a live person’s return. You must report all their income but can also claim the credits they’re entitled to.
- Note their death on the return – Note their death date on the return.
- Sign – The estate representative should sign the return and attach a document showing their authority to sign the return. Surviving spouses can sign on behalf of their late spouse and note “filing as surviving spouse” in the signature area.
What filing status should you use if your spouse died during the tax year?
You can file jointly or separately. However, if you file separately, you may not be able to claim certain credits on your return.
If you remarry in the same tax year as your spouse dies, you should file a joint return or elect the married-filing-separately filing status with your new spouse. Typically, in this situation, the late spouse’s return should be filed as married filing separately.
How to claim a refund owed to a deceased taxpayer
A surviving spouse can file a joint return and claim any refund that is due to the couple together. Or, the estate executor can file the decedent’s last tax return and have the refund routed to the estate.
If the above situations aren’t applicable, then, file Form 1310 (Statement of a Person Claiming Refund Due a Deceased Taxpayer). A surviving spouse can also use this form to get a refund check reissued in their name alone, rather than in their name and their late spouse’s name.
Tax liens on a deceased person’s assets
If the deceased person owes $10,000 or more in back taxes, there may be an IRS tax lien against their assets. You can find out if there’s a lien by doing a public records search. If so, contact the IRS Lien Unit for a payoff amount.
If the property sells for more than the amount of the lien, the proceeds should go to the IRS to cover the tax debt. Any remaining amounts go to the estate, and then, they are distributed to other creditors or heirs as applicable.
However, if the proceeds from the sale of the asset won’t be enough to cover the tax debt, you need to request a lien discharge. To do that, file Form 14135 (Application for Discharge of Property From Federal Tax Lien).
What about estate tax liens?
If the estate is required to file Form 706, a lien automatically applies to the whole estate. Even if the lien has not been established as a public record, it still exists. To request to have it discharged from a certain piece of property, file Form 4422 (Application for Certificate Discharging Property Subject to Estate Tax Lien).
How to minimize tax debts after someone dies
Ideally, you should be proactive – consult with an estate attorney. They can give you strategies for minimizing estate and income taxes.
When filing the decedent’s final return, make sure to take advantage of all possible deductions and credits. You may want to work with a professional to ensure that you file the tax returns correctly. If there is a large back tax liability, you may want to have a professional review the returns to ensure that have been filed correctly.
FAQs About IRS Debt After Death
How long can the IRS collect unpaid taxes?
Once the tax is assessed, the IRS has 10 years to collect it. As explained above, they may make a claim against the estate, the executor, or the surviving spouse depending on the situation.
What if my deceased parent owes taxes with no estate?
Normally, the estate is responsible for a deceased person’s taxes. However, if someone doesn’t have enough assets to go through probate, they essentially have no estate, and thus, the IRS cannot make a claim against the estate for the unpaid taxes.
However, there are exceptions. In particular, if the decedent owned assets that were exempt from probate, the IRS may still have the right to place a lien against those assets. Similarly, if the decedent owned assets jointly or had joint bank accounts, the IRS may also be able to make a claim against those assets.
What if my deceased father or mother owes back taxes?
Contact the IRS to find out how much your parent owed in back taxes. Then, let the IRS or state revenue agency know that they should make a Claim of Proof to the estate while it’s going through probate. The estate executor will pay the back taxes out of the estate’s assets.
Get Help With a Deceased Person’s Tax Issues
Dealing with the loss of a loved one can be incredibly painful, and juggling paperwork on top of that is very stressful. We can help. Whether you’re a spouse, an estate administrator, or anyone else, contact us for a free consultation today.
At the W Tax Group, we have extensive experience helping people with all kinds of state and federal tax issues. We can help you through this difficult time. We can also help if you have a tax debt that you can’t pay.
