My grandfather died 5 years ago. His estate has been in probate court since his death because of a dispute between the trustees who are his children and his heirs. The judge did allow some of his assets to be distributed which were the items the trustees could agree on. The IRS was not satisfied with the taxes that were paid and believes that his estate owes more money. My question is can the IRS take back or put a lien any of the assets that the judge already allowed to be distributed?
1 Answer from Attorneys
Absolutely. Taxes must be paid, if not by the estate, then by recipients of the assets of the estate. My sense is that the court would have taken that possibility (that taxes may be due) into consideration before allowing any distribution from the estate. Long drawn out estate battles are beneficial to the attorneys. Do what you can to reach a settlement because the IRS is also entitled to statutory interest and possibly penalties as well.