In another recent tax case it was decided that a lawyer’s malpractice won’t prevent penalties for a late-filed estate tax return.
The executor hired an attorney to file an estate’s Form 706. But, unbeknownst to her, the lawyer was battling brain cancer and misled her about filing for an extension.
Well after the filing due date, the executor learned the 706 had not been filed. When the return was finally filed, IRS levied penalties for late filing and late payment.
Even though the estate won a malpractice suit against the attorney, an appeals court found the executor responsible for late filing and upheld the fines.
As an executor, your due diligence is great and you need to take extraordinary precautions to ensure that all is being addressed timely and accurately.
Specht, 6th Cir.