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Will Form 5495 Statute: What You Should Know

While it might seem unimportant when you see a lawyer and an investigator on trial, it is in the end critical to the success of the litigation. In this blog, we will discuss how to minimize liability to pay taxes by a personal representative and what are the risks. The personal representative is in a tricky position, the person for whom the probate estate is being dissolved. If an estate and executors are not careful, the personal representative can be sued for many types of legal malpractice. As a personal representative, a person who is in the position of paying taxes on an estate can easily be sued by the estate for failure to pay taxes. If the estate's taxes are not paid it will immediately face a tax lien, and if a tax has not been paid, the estate can even be put in liquidation. The personal representative of probate estates is required by law to report and pay to his/her state any taxes levied against the probate estate. A state tax lien arises if the probate estate fails to pay the taxes required by the state and the estate must pay to the state the amount of that tax, plus interest. A payment to the state on the amount of the tax and interest is typically described as a “pay the tax” order (PTA). This is a very powerful tool for the state and the estate, but requires a personal representative, in this case the personal representative of the estate, to pay tax, interest, and pay PTA charges. The estate is then allowed to pay the remaining amount of tax on the personal representative's personal account. This is where a situation comes up where a probate estate has failed to pay taxes. However, the estate has not filed a PTA with the state, and it is not known when and if it will do so. In essence, the estate's estate tax liability is not fully satisfied. The estate itself can then be put into probate and the estate tax liability can be assessed by the state when it comes time for it to be levied (by the probate court). The estate does not have to pay tax to the state during this time. The tax liability may be reduced, but if not, the estate must pay the amount of the tax and interest plus PTA charges. Even if a private or partnership estate has not filed a state tax lien, if the estate has not paid the tax during the period where it has to do so, it cannot pay the tax at that time.

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