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How do you deal with an IRS notice stating that you owe taxes on a trust fund disbursement that you did not receive?

The trust fund is controlled by my stepmother and I suspect she withdrew funds on my behalf, but I did not receive the funds. I never received any notification related to the withdrawals, only notification from the IRS that the income I was reporting was being increased because of the disbursement of these funds.

Dec 14, 2013 by Sonserae in  |  Flag
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2 votes

I would advise talking to your stepmother about this distribution she apparently made and also consulting the attorney that drafted the trust documents. A CPA may also be able to help with this situation.

Comment   |  Flag   |  Dec 16, 2013 from Bloomington, IL

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You should have received a form K-1 from the trust. I would consider talking to a local Enrolled Agent to deal with IRS. EA's along with CPAs and Attorneys can represent you in front of the IRS. If your stepmother did indeed do what you suspect, I would contact an attorney and talk about your options with regards to your stepmother..

Comment   |  Flag   |  Dec 18, 2013 from Alexandria, VA

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Great answers from Curt and Kyle. I would also suggest going to the stepmother first. Hopefully she can help you in the next step. If she wasn't willing to help then I'd go to a CPA and then the attorney.

Best of luck, Michael Pemberton, http://certusfg.com

Comment   |  Flag   |  Dec 20, 2013 from Atlanta, GA

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