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Tax Court Holds that Fractured Hip Is No Excuse for Late Filing and Payment of Estate Tax

The Tax Court has held that a fractured hip is no excuse for the late filing and payment of estate tax.  In this case, the decedent’s nephew and the family’s tax professional were appointed as co-administrators of the estate.  The time for filing the return and payment of the tax were both extended by the IRS.  The tax professional fractured his hip, resulting in a hospital stay.  The estate tax return was filed late, showing a liability and balance due, which was also late.  The IRS then assessed penalties for failure to file the return on time and failure to pay the tax on time.  The Court found that the tax professional’s injury was insufficient as reasonable cause for failing to file the return on time because the tax professional was still able to meet with the nephew a few times a week to take care of other estate business.  The Court also found that there was no reasonable cause for the late payment because a reasonable person in the nephew’s position would have found another professional to see to the filing of the return and payment of the tax.

Points of Interest

  • Among the more popular retirement plans is the Individual Retirement Account (IRA), which an individual can set up at a bank, an investment firm, or even an online account.
  • There are two kinds of IRAs, traditional IRAs and Roth IRAs.
  • If you regret not converting your traditional IRA to a Roth . . . you have until October 18, 2011 to make the election to convert.

By: Basi & Basi at the Center for Financial, Legal and Tax Planning for Transworld M&A Advisors