IRC 6324

The United States District Court for the District of Kansas issued United States of America v. Karst at Case No. 24-cv-04090-TC on February 27, 2026 in which they deemed the recipient of estate property to be personally liable under IRC 6324 for unpaid estate taxes.  In this case, the decedent left an estate with a value of nearly $4 million in 2007.  This was a taxable estate and the Form 706 reported an estate tax due of $792,790.75. The estate was administered by the trustees, who were the decedent’s sons, as successor trustees of his trust.  They opted to pay the estate tax in installments. While they made a few payments, they stopped short and still owed more than the original amount at the time of enforcement action by the IRS. During the administration of the estate, the sons opted to fully distribute the estate to the beneficiaries – themselves, while not paying the estate tax due. The elements of liability under the statute were easily met in this instance as the tax debt was valid and outstanding, while the beneficiaries received distributions of estate property and the estate failed to pay the tax debt.  Couple items to note here…the statute provides that the personal liability under this provision is joint and several among all transferees.  Further, the more practical issue seen by this practitioner is related to potential personal liability under the Federal Lien Priority statute at 31 U.S.C. 3713 whereby an administrator of an estate has risk for personal liability while ignoring the tax liabilities of the decedent on distribution of the estate.  It is highly suggested that if one is a Personal Representative, Executor or successor Trustee on a decedent’s estate administration, that time is taken to fully explore current tax compliance by the decedent so there is no violation of this statute that could cause personal liability for the administrator of the estate.