Estate Executor Can Be Liable for Tax After Fraudulent Transfers

The IRS can seek to recover an estate’s tax liabilities from its executor because he fraudulently transferred the decedent’s estate to himself and rendered it insolvent, the US Tax Court held in a memo opinion Tuesday.

Robert Spenlinhauer is liable for a $4 million unpaid estate tax and penalties totaling more than $1.5 million for failure to file and a substantial tax valuation understatement, Judge Tamara W. Ashford said for the court.

Spenlinhauer took possession of his deceased mother’s property and failed to file an estate tax return for nearly 11 years. Under Section 6901, the IRS may assess ...