In the case of Specht v. United States, executors of a decedent’s estate sued to get a refund of late-filing penalties. The US District Court found that malpractice by the estate’ attorney, who was later declared incompetent, did not provide reasonable cause for the late filing of the federal estate tax return. Basically, the Court recited that the executor knew about the estate tax deadline and knew the taxes had not been paid, but kept depending upon what her attorney told her, even though the executor was getting notices from the probate court and other client of the attorney that things were seriously wrong. She even sought the advice of another attorney, who advised her to change attorneys, and she ignored that advice because her original attorney assured her things were all right. In fact, they were not. Neither the federal nor state estate tax returns were filed on time. Tax payments were late. And it hurt – a $1,198,261.38 penalty was upheld by the court.
Probate and Estate Planning News
