It was noted in a recent Canadian Tax Foundation article that under certain circumstances, the Internal Revenue Service (IRS) could hold an Executor or a beneficiary of an Estate personally liable for the deceased person’s unpaid U.S. Federal Income, Gift and Estate Tax, and for any interest and penalties thereon.
It was also noted that if a U.S. citizen who lives in Canada does not file their U.S. returns, or if those returns contain errors, these rules may generate costs and burdens for the family members and the fiduciaries. This could also extend to penalties imposed for not filing Foreign Bank Account Reports.
Action Item: Carefully consider whether you should accept the role of Executor for a U.S. person (U.S. Citizens, Green Card holders, U.S. Residents, etc.).