Click to return to BOL home page



September 8
Checkup for your RDC Program;
Susan Orr

September 10
Critical Issues on Certificates of Deposit;
Deborah Crawford

September 16
S.A.F.E. Act - Auditing for Compliance;
Patricia Cashman

September 22
FinCEN's Beneficial Owners Proposal: What It Can Mean for You;
Sonja Kriegsmann and John Burnett

September 23
Bankruptcy 101;
Sam Ott

September 24
Using CPTED to Make Our Banks Safer;
Dana Turner and Carol Dodgen



Topic Options
Manage Topic
#289353 - 12/15/04 01:28 PM Tax Refund Check Payable to Deceased Person
Anonymous
Unregistered


Can a surviving spouse deposit a tax refund check that is payable jointly to him and his deceased wife?

Top
General Discussion
#289354 - 12/15/04 02:28 PM Re: Tax Refund Check Payable to Deceased Person
HappyGilmore Offline
10K Club

Registered: 06/11/04
Posts: 17403
Loc: Moron, Mongolia
no, because it can't be properly endorsed.
_________________________
The only people you should be getting even with are those that have helped you in some way.

Top
#289355 - 12/15/04 03:14 PM Re: Tax Refund Check Payable to Deceased Person
Pup Offline
Power Poster

Registered: 09/19/03
Posts: 5045
Loc: Pedaling along a scenic highwa...
"But then again, who will file a forged endorsement affidavit?", he says with tongue firmly planted in cheek.

Top
#289356 - 12/15/04 04:57 PM Re: Tax Refund Check Payable to Deceased Person
Greg Offline
Platinum Poster

Registered: 05/18/04
Posts: 809
Loc: Michigan
I've not seen anything directly on point; however, the IRS does expressly permit a surviving spouse to sign a joint tax return provided no representative has been appointed by the courts. The would sign: "John Smith for Mary Smith, decesased" and the word "Deceased" along with the date of death need to be written at the top of the return. (See tax topic 356 on www.irs.gov)

It would seem logical for them to allow the same on the endorsement but we are talking about the IRS so logic might not be an issue.
_________________________
If you approach life with pure logic you can avoid almost all of the fun.

Top
#289357 - 12/15/04 05:52 PM Re: Tax Refund Check Payable to Deceased Person
John Burnett Offline
10K Club

Registered: 10/27/00
Posts: 30292
Loc: Cape Cod
Once the check is issued, it is no longer an IRS matter. Checks are issued by the Financial Management Service, of the Fiscal Service, of the Department of the Treasury. The governing regulation is "Indorsement and Payment of Checks Drawn on the United States Treasury," 31 CFR Part 240.

Interestingly enough, FMS says nothing about jointly payable checks in this regulation. However, it does have a rule on checks payable to deceased persons. It's in 240.15.

  • If an executor or administrator has been appointed under applicable state law, the executor or administrator may endorse the check, indicating the capacity in which the executor or administrator is acting, and including his/her signature. The bank should obtain and retain documentation of the death of the payee and the appointment of the executor or administrator.
  • If no executor or administrator has been appointed, the check should be returned to the IRS for a determination as to "whether, under applicable law, payment is due and to whom it may be made." (240.15(b))


I've included the parts of the regulation that would address a tax refund check. Different rules would apply for recurring payments, such as social security or annuity payments.
_________________________
John S Burnett
BankersOnline.com

Top
#289358 - 12/15/04 06:00 PM Re: Tax Refund Check Payable to Deceased Person
Ken_Pegasus Offline
10K Club

Registered: 08/30/01
Posts: 17273
Loc: Another trip around the sun
As noted, a surviving spouse cannot supply the decedent's signature. A properly appointed personal representative of a decedent's estate could sign in that capacity. That's probably the easiest, safest way to assure that the money goes where it is supposed to go.

I looked at the FMS and IRS web sites and found nothing on point, so I called the IRS Helpline which is (according to GAO) correct about 76% of the time. They said the surviving spouse should mail the check back to the regional office where the return was filed along with a letter of explanation, proof of death, and a request that IRS to reissue the check in the name of the survivor. I'm pretty certain this is in the 24% category; i.e. we might be talking about a $400 check or a $40,000 check and the personal representative might take a dim view of the IRS declaring a right of survivorship in the latter.

This post went up before I saw John's, but I decided to leave it in place...


Edited by Ken_Pegasus (12/15/04 06:02 PM)
_________________________
The world is not a wish granting factory. Hazel Grace Lancaster

Top
#289359 - 12/16/04 08:56 AM Re: Tax Refund Check Payable to Deceased Person
JimK Offline
100 Club

Registered: 10/25/02
Posts: 107
Loc: Alexandria, VA
A minor correction to John's post, the section is 240.14 vs. .15....no doubt a typo.
_________________________
Jim K

Top
#289360 - 12/16/04 10:13 AM Re: Tax Refund Check Payable to Deceased Person
John Burnett Offline
10K Club

Registered: 10/27/00
Posts: 30292
Loc: Cape Cod
Sorry, Jim, but I ducked this bullet. Treasury issued a revised interim rule in the 10/19/2004 Federal Register (LINK) that added a section about "Electronic Checks and Substitute Checks" at 240.3, bumping up the section numbers on the rest of the regulation.

The cite of 240.15 stands.
_________________________
John S Burnett
BankersOnline.com

Top
#289361 - 12/16/04 10:42 AM Re: Tax Refund Check Payable to Deceased Person
JimK Offline
100 Club

Registered: 10/25/02
Posts: 107
Loc: Alexandria, VA
John, I stand corrected. A reminder to myself (and others) not to rely completely on the GPO web site for the Code of Federal Regulations. I do recall, now, the Federal Register item.
_________________________
Jim K

Top
#289362 - 12/16/04 10:43 AM Re: Tax Refund Check Payable to Deceased Person
Anonymous
Unregistered


How do you know he's dead? Small town bank?
Unless the spouse was estranged, most states transfer property to the surviving spouse, even without a will anyway, so why make her jump through hoops. Don't you think she's going through enough right now?


Edited by Ken_Pegasus (12/16/04 11:57 AM)

Top
#289363 - 12/16/04 10:53 AM Re: Tax Refund Check Payable to Deceased Person
waldensouth Offline
Power Poster

Registered: 11/07/01
Posts: 7796
Loc: below the gnat line
Dear Anonymous, your choice of language is not appropriate for a professional forum and topic. The logic of your argument is flawed as well. The customer isn't dealing with the state, she's dealing with the federal government. It is much better to handle this correctly the first time than to cause her additional pain when they come back years later demanding the funds because it wasn't handled according to their rules. We've had that happen to a customer recently. She doesn't need to be put through the pain of re-living everything once she begins healing from this loss.
_________________________
Life is an adventure, it's not a package tour.
Eckhart Tolle


My Opinion Only.

Top
#289364 - 12/16/04 11:59 AM Re: Tax Refund Check Payable to Deceased Person
Ken_Pegasus Offline
10K Club

Registered: 08/30/01
Posts: 17273
Loc: Another trip around the sun
Quote:

...most states transfer property to the surviving spouse, even without a will anyway,




Some states have a procedure to dispense with administration and pass a small estate to the heirs with no formalities. Most don't. Those that do don't bestow permission to cash checks payable to a decedent.
_________________________
The world is not a wish granting factory. Hazel Grace Lancaster

Top
#289365 - 12/16/04 12:11 PM Re: Tax Refund Check Payable to Deceased Person
John Burnett Offline
10K Club

Registered: 10/27/00
Posts: 30292
Loc: Cape Cod
Strangely enough, these sorts of situations usually come up because the surviving payee asks how to handle it, not because the banker is particularly "plugged in." And most bankers that I know would endeavor to be compassionate and understanding when offering the answer.
_________________________
John S Burnett
BankersOnline.com

Top
#289366 - 12/16/04 12:24 PM Re: Tax Refund Check Payable to Deceased Person
Jokerman Offline
10K Club

Registered: 11/24/03
Posts: 12846
Quote:

...I called the IRS Helpline which is (according to GAO) correct about 76% of the time.





Top
#289367 - 12/16/04 02:33 PM Re: Tax Refund Check Payable to Deceased Person
Anonymous
Unregistered


Waldensouth, I'm not trying to insult anyone. My point is, that if she just endorsed it, and let's say deposited it through an ATM, it never would have been questioned unless it was a small town bank where everybody knows everybody and everybody elses business.

Top