The IRS is made up of several departments, each responsible for different functions. The department that processes tax returns is separate from the Collections Department. Even after the IRS has been notified that a taxpayer has passed away, the Collections Department may not immediately receive or process that information. As a result, collection notices may continue to be mailed automatically until the account is updated.

Even after you've contacted the IRS regarding the passing of a taxpayer, additional correspondence may continue for several weeks. This does not necessarily mean the IRS intends to pursue immediate collection action. In many situations, the account is simply moving through separate IRS systems that update at different times.

When Will the Collection Notices Stop?

Once the IRS Collections Department reviews the account, collection activity will generally be updated based upon the information available. Depending upon the circumstances, the account may qualify for Currently Not Collectible (CNC) status, which means there are no assets currently available from which the IRS can collect the outstanding tax liability.

Who Is Responsible for a Deceased Person's Tax Debt?

In most situations, unpaid tax liabilities belong to the deceased person's estate—not to surviving family members. Estate assets are generally used to satisfy outstanding tax obligations before distributions are made to beneficiaries. If there are no estate assets available, collection options may be limited. Every estate is unique, however, so it is important to obtain professional guidance regarding your specific circumstances.

Responsibilities of an Estate Fiduciary

Individuals serving as executors, administrators, or fiduciaries have certain responsibilities when dealing with the IRS. The agency should be notified when fiduciary responsibilities begin and again when estate administration has concluded. Because IRS records are updated by different departments, it may take several weeks before those changes are reflected throughout the system.

Understanding an IRS Notice of Intent to Levy

A Notice of Intent to Levy is one of the final collection notices the IRS typically sends before pursuing certain collection actions. However, receiving this notice does not automatically mean that your wages, bank account, or property will be seized immediately. Many levy notices are generated automatically while the IRS continues reviewing the account.

The IRS can only levy assets that legally belong to the taxpayer and are available for collection. Every account is evaluated based on its individual facts and circumstances.

Keep Good Records

One of the most important things you can do is maintain copies of every notice, letter, and document submitted to the IRS. Although collection activity often slows once the IRS has been properly notified, processing delays may result in additional notices being mailed before the account is fully updated.

If you are uncertain about your responsibilities or continue receiving IRS collection notices after reporting the passing of a taxpayer, professional representation can help ensure the matter is handled properly and provide peace of mind during an already difficult time.