A KING’S RANSOM

It is good to be king, as we have noted on previous occasions.  The federal government is not shy about preserving for itself rights or privileges not available to regular litigants, be they individual or corporate.

Among such privileges, Congress gave the feds priority over other creditors clamoring for payment from an insolvent debtor.  What is more, the U.S. Government may go after the individual who distributed the debtor’s money to private parties before Uncle Sam.

Be careful, then, before agreeing to become someone’s executor.  A personal representative who pays the heirs and leaves the estate unable to pay federal taxes may become personally liable to the IRS.  All it takes is that the personal representative knew taxes would be due when he distributed the assets to the heirs first.

Estate taxes are not the only occasion when the government turns against individuals to get the money it did not otherwise obtain.  Thus the owners of companies owing, among other cases, federal payroll taxes or customs duties, have been personally sued when the companies failed and could not pay federal agencies.  Officers and directors, not just the owners, may find themselves at the wrong end of those lawsuits.

Advice from a good attorney is rarely superfluous when dealing with the government.