Fun Law Fact of the Day: An executor of a Pennsylvania estate is personally liable for handling the estate properly. This includes tax issues, no matter how complex.
A state court has no authority over Federal tax issues. It’s a very unusual situation involving an international tax treaty, so I’m working on a request for a PLR (Private Letter Ruling) from the IRS. There’s a new term to toss around at cocktail parties.
A PLR is a determination issued by the IRS that interprets and applies tax laws to the taxpayer’s represented set of facts and to confirm with the IRS that a prospective transaction will not likely result in a tax violation.
Why the fuss? Because, if the Pennsylvania executor releases the money to the foreign beneficiary and later finds out that taxes are due to the IRS, the executor would have to pay out of his own pocket. Better safe than sorry!