Filing a decedent’s final federal income tax return without including Form 1310 and supporting documentation will result in major delays in receiving an income tax refund that is due. Improper filing could postpone the IRS issuing the refund check by 1-2 years. As a result, the executor may need to keep the estate checking account open for 1-2 additional years to have an account where the eventual refund check can be legally deposited.
Our clients wish to conclude the administration of a loved one’s estate as efficiently as possible. This article will discuss the steps the personal representative of an estate needs to take order to avoid delay and receive a federal income tax refund due to a deceased taxpayer as quickly as possible.
Properly Complete Form 1310
First, you need to know Form 1310 must accompany a decedent’s final income tax return if a refund is due to the deceased taxpayer. Form 1310 looks straightforward enough, but it is easy to make a mistake. The correct box must be checked. If a personal representative (Executor or Administrator) has been appointed, check the box for Part 1 B. If someone met with the Register of Wills to be named Executor or Administrator and was appointed, then there is a court-appointed personal representative of the estate. Appointment by the Register of Wills is considered a court appointment, even though you most likely did not have to go to court or appear before a judge to be appointed executor. Many people are uncertain on this point and check the wrong box. You do not need to check any boxes in Part II if you are a court-appointed personal representative for the estate and have checked the box for Part 1 B. The IRS is careful when issuing tax refunds due to deceased taxpayers. Checking the wrong box can result in significant delays because the IRS will often require additional documentation and verification of identity from a person requesting a refund where that person is someone other than the personal representative of the estate.
Submit an Original “Short Certificate” with Form 1310
If you were named Executor or Administrator by the Register of Wills, then you are a “court appointed or certified personal representative” as defined by Form 1310. As a result, you must submit documentation that you are the personal representative of the estate. This documentation takes the form of a piece of paper known as a “short certificate.” When the Register of Wills appointed you as personal representative of the estate, they issued either “Letters of Administration” or “Letters Testamentary” and provided you with additional paperwork, known in Pennsylvania as “short certificates” that you can provide to third parties to prove you oversee administering the estate. If you do not have a short certificate in your possession, you can obtain one by contacting the Register of Wills. An original short certificate must be attached to Form 1310 when the final income tax return (Form 1040) is being filed. A photocopy is not acceptable. If you do not attach an original short certificate, you will be contacted months later by the IRS requesting the same, and it will take many additional months after that for them to review your follow-up submission, delaying the issuance of a refund.
Submit a Paper Tax Return (Form 1040) if a Tax Refund is Due to a Decedent
If there is a refund due to the deceased taxpayer, do not file the final income tax return electronically. At the time of this writing, it is not possible to submit the deceased taxpayer’s final 1040 electronically and quickly receive a tax refund. This is because Form 1310 must accompany the income tax return together with an original “short certificate” as mentioned above. If you file the tax return electronically, the IRS will eventually issue a letter advising you that Form 1310 must be submitted together with documentation of the personal representative’s appointment. This will take many months, and once submitted, it will take many additional months for the IRS to process.
A delayed refund can be avoided by properly filing the decedent’s final income tax return, together with a correctly completed Form 1310, accompanied by an original “short certificate.” Our recommendation is to have an estate attorney take a look at the tax return and Form 1310 before filing it with the IRS, even if it has been prepared by an accountant. It does not take much time to have it reviewed by your estate administration attorney, but not filing correctly can delay the closing of the estate account by 1-2 years.
Disclaimer: This article has been posted for general information purposes only. You should not act upon the information in this article without first retaining legal counsel.