Case Study
Case Study
Multi-State Liens for an
Elderly Taxpayer with Dementia
Problem
Solution
We conducted a full investigation into each lien, tracing back a decade of estimated assessments, substitute filed returns, and state tax actions. We identified what was owed, why the tax had been assessed, and presented detailed resolution options to the guardian.
Outcome
With our guidance, the guardian successfully worked with the state to have the outstanding tax liabilities resolved through the sale of the property, allowing the transaction to move forward.
Lesson Learned
In this case, the state had issued substitute returns due to unfiled tax returns, assessments that do not expire like standard filings. Because the original tax years were more than 10 years old, records were difficult to obtain, but the Missouri DOR ultimately closed the case. This situation underscores the importance of filing tax returns even when payment isn’t possible. Filing starts the statute of limitations clock; failing to file means collections remain open indefinitely, and penalties for not filing exceed penalties for not paying.
An elderly taxpayer living with dementia had accumulated multiple state tax liens over a 10-year period. The taxpayer’s legal guardian, who had moved the taxpayer to another state, needed to sell the taxpayer’s home but had no access to prior financial records and could not navigate the complex lien and tax history.