Tax Law Update

It may be the attorney’s fault. . . but you’re still liable

By David A. Handler, partner, and James Thibodeau, associate, in the Chicago office of Kirkland & Ellis LLP

In Estate of Fuertes v. United States, 2009 WL 3028823 (N.D.Tex.), the district court ruled against an estate that sought a refund for penalties assessed under Internal Revenue Code Section 6651 for failing to timely file an estate tax return.

In Fuentes, the estate’s attorney filed the estate tax return, payment and an application for an extension 20 days late under the mistaken assumption that an automatic six-month extension to file estate taxes existed.

Although the attorney testified that the mistake was his, the court denied the estate’s refund request.

The court found that the error at issue was not one based on reliance on an attorney’s legal advice but instead was a failure in the delegation of the executrix’s own duty.

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