I just learned my 82-year-old mother owes $130,000 in back taxes to the IRS - and she could lose her house

MW I just learned my 82-year-old mother owes $130,000 in back taxes to the IRS - and she could lose her house

By Beth Pinsker

My sibling and I want to inherit the house one day, but we might have to sell to pay off the debt

Keeping a beloved home in the family can be difficult if you owe money to the IRS.

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Dear Fix My Portfolio,

My mom is 82 and just told us about a bad tax situation she's in. For the last several years, she's been working as a consultant, but the money from that has been dwindling as she gets older. A few years ago, apparently, she underpaid her taxes on her contract income. She didn't tell me and my sibling about it at the time, and instead hired an accountant to help her. He didn't do the right things, though, and the fees and interest have compounded. They now say she owes $130,000 and she has to work something out immediately or they'll put a lien on her house, which is a great place in a beach town. We have all sorts of questions about how to help her get out of this, because my sibling and I want to inherit the house and share it. Does the debt go away when she dies? If not, could we protect the house by putting it in a trust? Is there any way to negotiate with the IRS to pay less? Are we better off just paying the debt completely now, and sparing the house? It would be tough, but we could swing it if we took money out of our own retirement accounts.

Tied in Knots

Dear Knots,

It can be tough on families when the older generation is in full control of their finances but starts making mistakes. There's so much shame and confusion on the part of the person who needs help, and sometimes there's denial that anything bad is happening. Your mom probably thought she was on top of things and was avoiding getting your involved in order to spare you the burden and her the embarrassment.

This can lead to disaster in a lot of families, as you are finding out. If your mom had come to you when she first had trouble with her taxes, you might have headed off this situation completely. Taxes are a complicated task and it shouldn't hurt anyone's ego to ask for help. For anyone out there starting to have this issue, you can just ask your children how they get their taxes done and if you can add your return to their pile. In the same vein, all the adult children out there can ask their parents if they want to be part of their "family plan" for getting taxes done.

It should definitely be a family discussion anytime a letter comes from the IRS stating a problem. That should be a big red flag, and it bears discussing. When you have to deal with the IRS at the next level of intervention, you need the right kind of expert help. Word-of-mouth recommendations definitely help in this situation and you need to widen your network for that, which is why open conversations are so important.

Vetting a tax expert can also be difficult. Not a lot of people know about the distinctions between a certified public accountant $(CPA)$, an enrolled agent $(EA)$ with the IRS, and a tax practitioner with no special certifications. Anyone can say they are a tax preparer without any special training, so you want to be sure to look for the ones who have designation that show they are licensed. You can search specifically for tax experts with specific experience with tax audits or legal issues through the professional organizations of the AICPA and the National Association of Enrolled Agents. You can also get a list from the IRS.

"You want somebody who knows how to do IRS representation," said Tom Gorczynski, a tax expert and educator. "They need to manage the collection aspects and protect the taxpayer."

Your options now

You're a little past the stage where fixing family communications can help you, however. Your mom has dropped a big decision in your lap and you need to work with the tax specialist you hire to figure your way out.

It's not unusual to have to hire a new tax representative to clean up after old tax mistakes, and possibly get a better outcome for the taxpayer. "I literally just finished a case where the taxpayer did not respond to a notice of a $400,000 assessment, but we got it reversed," said Gorczynski. "When the IRS makes an assessment like that, it's not the end of the story. First, you have to make sure the amount is correct, and if it's not, you can ask for a reconsideration."

The next step would be to try to reduce the debt through negotiation. "Depending on the circumstances, options like an offer in compromise could settle the existing debt and potentially reduce penalties and accumulated interest," said Matthew Cordes, an enrolled agent with the IRS who runs his own tax firm.

If the answer ends up that your mom owes $130,000, then it's going to be hard to make that go away any other way than paying it. Taxes are taxes - there's not much of a way around that, even in death.

"IRS tax debt does not necessarily disappear when the taxpayer dies," said Cordes. "If the estate has assets, the IRS debt must be satisfied before assets can be distributed to the heirs."

That estate generally includes the house, even if it's in a trust. "The IRS has lien and levy power to collect taxes. But to take your primary residence would require court action, which would be a last resort for collection," Cordes said.

While you and your sibling would not necessarily be personally responsible for the debt, it would depend in the end on how your mom's accounts are titled. If you are cosigners or co-owners of property or financial accounts, you could be liable, Cordes noted.

The fate of the house rests on what you're able to do about the debt. Using your own retirement funds to pay it off sounds like a worst-case scenario you should avoid. I know you want to inherit the house, but you can't jeopardize your own savings to keep it. If that's what you have to do, it sounds like your family might not collectively be able to afford to keep the house for the next generation. It's a hard truth to hear, I know.

If you end up selling the house and your mom spends through her money and dies before the debt is paid off, there's a chance the debt could go away eventually and you would not be forced to pay it out of your own pocket. "If the estate had no assets that it could use to pay off the debt, it could be deemed uncollectable and would expire," said Gorczynski. "The IRS generally has 10 years from the date tax is assessed to collect."

That's not the outcome you should be looking for, though. I hope that you can hire a tax pro with the right experience who can dig into the debt owed and reduce it for you to a manageable amount. Then your family can work together to pay it off, and you all can move on in peace.

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-Beth Pinsker

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April 06, 2026 14:25 ET (18:25 GMT)

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