Estate of Demps

Trusts and Estates

New York Law Journal


Surrogate Nelida Malave-Gonzalez

In a compulsory accounting action by the United States on behalf of the Internal Revenue Service (IRS), the IRS moved for summary judgment on its claim for over $225,000 in overdue estate taxes. It sought payment of all remaining funds in the estate, noting as its claim exceeded the amount of estate assets it had preference over all other claims, after payment of administrative expenses. Co-trustee Stern cross-moved for an order and decree disallowing the IRS claim and dismissal arguing the applicable limitations period precluded IRS from collecting on its claim. IRS argued the executors, including Stern, knew of its claim for over 27 years and participated in settlement discussions in court and other proceedings. As such, the service of proof of claim and amendments on the attorney for Stern was sufficient to toll the limitations period. The court agreed, noting Stern's commencement of various proceedings, and admissions in those actions, implicitly and expressly acknowledged and ratified the authority of his attorney to accept IRS 1983 proof of claim, and all subsequent amendments on his behalf tolling the limitations period. It granted summary judgment to the IRS.

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