Legal Question in Tax Law in Maryland

IRAs moved to CDs by senior with mental challenges

My dad is 80 yrs old and always did his own taxes. In recent yrs he has had health issues with hardening of the auteries which has affected his logical/reasoning processes. He was audited for 2007 and 2008 due to issues with his IRAs. To avoid these issues he closed out all his IRAs at the end of 2008 and put them into CDs without realizing the tax implications. He finally decided to hire someone to do his 2008 taxes and just found out he owes a very large sum of money to the IRS. What is your recommendation. Is there some recourse for seniors who have made a such an error under circumstances where their mental faculties have worked against them. Please advise.


Asked on 4/04/09, 3:03 pm

1 Answer from Attorneys
Denese Dominguez Law Office of Denese Dominguez, LLC

Re: IRAs moved to CDs by senior with mental challenges

If, in fact, your father's mental state has deteriorated to such an extent, a guardianship may be in order. This may also be an extenuating factor to negotiate with the IRS or in tax court, but it is certainly not guaranteed. There are substantial penalties associated with early IRA withdrawals. I would recommend strongly that you retain a tax attorney in your area. Feel free to call if I can be of assistance.

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Answered on 4/06/09, 9:33 am


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