IRS Form 4810: Everything You Need to KnowPersonal Taxes
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Managing estates can get messy since determining the decedent’s tax situation prior to assuming personal representative responsibilities isn’t always possible.
Late tax returns, failure to make minimum IRA distributions, or incorrectly claiming tax deductions can create substantial tax debts after the decedent’s death.
You can be personally responsible for these tax debts as an estate executor if you don’t file IRS Form 4810 and request a prompt tax assessment.
However, the IRS will still hold you responsible for the estate’s due taxes after you submit this form if the assessment shows that the estate owes taxes and you’ve already distributed its assets.
You must file Form 5495 to request a discharge from personal liability for the estate’s taxes to ensure you won’t have to pay the estate’s due taxes.
Let’s go through everything you need to know about IRS Form 4810 and how it can protect you from paying an estate’s tax debt.
Table of Contents
What is IRS Form 4810?
However, you can only file this after filing all due tax returns and paying the full tax liability.
The IRS will only consider the request if Form 4810 shows that the estate executor is making the request for a prompt tax assessment under Section 6501(d) and includes copies of all the necessary documents.
Generally, an executor should postpone distributing the estate to heirs and beneficiaries until the IRS completes the tax assessment and determines if the estate owes additional taxes.
The Underlying Concept of Prompt Tax Assessment
The IRS has three years to review all tax returns and assess additional taxes to an estate. But most beneficiaries want to receive their portion of an estate immediately.
This puts an estate executor in a difficult position because they risk being personally liable for any additional tax liabilities if they distribute the estate before paying all due taxes.
Requesting a prompt tax assessment on IRS Form 4810 cuts the tax assessment statute of limitations from three years to 18 months.
Hence, by filing this form, the personal representative can speed up the estate distribution process and ensure they won’t be liable for additional taxes.
Requesting a prompt tax assessment under IRC Section 6501(d) is only possible under the following conditions:
- All due tax returns are already filed.
- None of the tax returns were fraudulent or fake.
- The return preparer didn’t underreport gross income or gift tax by 25% or more of the due amount.
Filling Out IRS Form 4810
Estate executors can only submit a request for a prompt tax assessment after filing the tax returns they refer to on IRS From 4810. Moreover, they must attach copies of these returns with a testamentary letter or letter of administration to the form.
The form’s top section collects the requester’s basic information, including their name, title, address, and telephone number.
Once you’re done with this part of the form, the next step is to list all tax returns for which you’re requesting a prompt tax assessment.
You’ll have to provide the information below to complete this portion of the form:
- Tax form number.
- The year when the tax period ended
- SSN or EIN as indicated on the tax return.
- The decedent’s name and address are indicated on the tax return.
- The IRS service center where the return was filed.
- The return’s filing date.
If a decedent had a spouse surviving or deceased, you must also include their name and SSN on the form.
Proceed to check the appropriate box if one of the returns you listed on the form is a corporate income tax return to indicate whether the dissolution is completed, it’s underway, and it will be completed before the 18-month statute of limitations expires or it hasn’t yet started.
The last step is to confirm that the copies of the tax returns listed on Form 4810 and letters of administration or testamentary letters are included with the form.
Remember to write a brief description of any additional documents you attach to this form before signing it.
The Next Steps After Filing Form 4810
The IRS will inform you if the estate you’re representing owes additional taxes within 18 months of filing Form 4810. Consequently, it would be best if you postponed distributing the estate’s assets and closing the estate until you receive the IRS’s decision.
Filing Form 5495 can further speed up the tax assessment process because the IRS has nine months to notify the estate executor of additional tax liability. Moreover, submitting this form ensures a personal representative is absolved of their responsibility for the estate’s taxes.
Once the estate’s federal taxes are settled, an executor can start dealing with an estate’s state and local tax obligations. Distributing the remaining assets to the beneficiaries is the last step a PR must take before closing the estate.
Frequently Asked Questions
Estate executors must file Form 56 to inform the IRS they’re authorized to represent an estate before requesting a prompt tax assessment with Form 4810.
Reporting the estate taxes on IRS Form 706 is one of your responsibilities as an estate’s personal representative. You can file Form 4810 if you underreported estate taxes and want to correct that mistake within 18 months.
You can submit Form 4810’s digital version through the IRS’s Free File tax software or send its paper version to the same IRS office where you filed the estate’s tax returns.
Submitting Form 4506 Request for Copy of Tax Return can help you assess the estate’s tax situation and determine whether filing Form 4810 is necessary.
Limiting an Estate Executor’s Responsibility with IRS Form 4810
Becoming an estate representative means that you accept responsibility for all unpaid taxes.
In most cases, the estate’s assets should cover the tax liability. Still, you’ll have to pay the tax debt from your pocket if you distribute the assets before determining if the estate owes additional tax.
Aside from reducing the time the IRS has to assess additional tax liability to an estate, filing IRS Form 4810 can also ensure you won’t receive a notice from the IRS years after closing the estate requesting payment of taxes owed.
Hence, asking the IRS for a prompt tax assessment is a precaution you should feel free to take whenever you’re unfamiliar with the tax situation of an estate you’re representing.
Logan is a practicing CPA and founder of Choice Tax Relief and Money Done Right. After spending nearly a decade in the corporate world helping big businesses save money, he launched his blog with the goal of helping everyday Americans earn, save, and invest more money. Learn more about Logan.