Robert S. Balter, P.C.

What Tax Returns Will Need To Be Filed?

The probate process requires filing proper state and federal inheritance tax returns. A lawyer must understand the interplay between estate administration and tax laws to provide quality legal advice.

From my offices in Jenkintown and King of Prussia, I’ve helped clients across greater Philadelphia prepare and file income, gift, inheritance and estate tax returns as part of the estate administration process by utilizing a five-step process which ensures both the accuracy and integrity of every return, every time.

  1. Prepare work papers and collect tax data
  2. Computer input
  3. Cross reference
  4. Review
  5. File

1. Prepare Work Papers

Preparing work papers begins by gathering source documents, including IRS Form 1099s (for dividends, interest, miscellaneous income, state tax refunds, Social Security income, retirement plan payments, annuity payouts and pension payments), IRS Schedule K-1s (from S corporations, trusts, estates and partnerships), receipts, charitable gift acknowledgments, doctors’ bills and canceled checks, and tax payments.

Work papers are generated for each source document, and then indexed and bound. We believe this is a crucial part of preparing an accurate return. In essence, my work papers are like writing a book about each return.

2. Computer Input

Inputting return information into a computer program to generate a return has become all but its own art form for tax attorneys. For example, a K-1 report often has to be broken down further into constituent parts so that they can be correctly reported.

Another area of complexity has to do with the foreign tax credit, and yet another with plain old dividends: some of which are foreign qualified dividends and some of which are not. More often than not, an entire spreadsheet may be required to properly calculate the foreign tax credit. Oftentimes, interest reporting having to do with private activity bonds and property state tax treatment can be complex.

3. Cross-Referencing

Cross-referencing is the process of identifying the source document in the work papers that supports each and every entry on the return. Most often there are multiple work papers to support a particular entry on a return. We do not file a return until it is cross-referenced.

Once the return is cross-referenced to source documents, that return is well-nigh unassailable making an audit if requested, both brief and boring regardless of the time that passed between the filing date and the audit date. Of course, this result depends on the client providing all pertinent information.

4. Review

This is the process through which the preparation done in the above three steps is assured. A copy of the reviewed return is kept in work papers.

5. Filing

This is the final stage of our five-step process. Filing by certified mail is accompanied by a certified mail that identifies the exact return being delivered. Most filings today are e-filed. Either the e-file transcript of filing or the certified mail receipt is kept in work papers with the reference copies of the returns.

Pennsylvania State Inheritance Tax Returns

Pennsylvania Inheritance Tax Returns are a little different. They are prepared with the same attention to detail and rigor, but source documents for each entry are included behind the pertinent schedule. It is our commitment to accuracy that allows us to proudly claim that we have not had a Pennsylvania Inheritance Tax audit since 1987.

A Detailed Approach

Our approach to return preparation is rigorous and detailed, sometimes academically so, always thorough and usually advantageous. Rely on my experience and track record to handle the tax aspects of inheritance.

Schedule a consultation with me by calling or sending a message online to find out how I can help you.