Heirs Owe Taxes

We have a recent ruling from the 9th Circuit that the estate heirs of Allen Paulson are liable for his unpaid taxes to the tune of $10M.

His estate in total was $200M, which means his estate owed taxes at his time of death (minus the $12.06M estate tax exemption). An agreement was made that all estate taxes due would be paid by the estate over 15 years - which was all good and dandy until the estate started missing payments. The IRS took notice and called for the rest of the liability to be paid immediately.

Because the heirs to the estate effectively control it - the IRS decided to sue them for the unpaid balance. The heirs tried to argue that they weren’t liable due to the timing of who-owned-what in the estate at the time of death. The government wasn’t having it and ruled the heirs are in fact, personally liable for the remaining $10M tax due.