Tuesday, October 18, 2016
In United States v. Spoor, an executor was granted a special estate tax lien as part of a § 6166 election that defers payment of federal estate taxes. At the time of the grant, the executor had only been paid part of his executor fees, and the IRS is allowed to demand a lien before allowing the Section 6166 election. Eventually, the property fell below the amount still due to the IRS, forcing the executor to assert his claim that he could use the liened property as funding for his unpaid fees. On appeal, the executor argued that his executor fees should have priority, otherwise making it difficult to obtain serving executors. Subsequently, the Eleventh Circuit Court of Appeals ruled that the lien has priority. The moral of this case is that executors should make pay arrangements of estate administrative expenses, especially when making a § 6166 election.
See Charles Rubin, Executor Loses Out on Fees Due to Section 6166 Lien, Rubin on Tax, October 16, 2016.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.