If the estate paid the taxes on Form 1041, you should not have received a K-1. But if you just leave the K-1 off your return, you will get a notice. The IRS receives a copy of your K-1 along with Form 1041, so they will be expecting to see the income from the K-1 on your tax return.
You need to check with the person responsible for filing the 1041 to clear this up. Ask for a copy of the estate return.
Some people get the 1041 Income Tax return for estates and trusts mixed up with the 706 Estate Tax return. On the 706 the taxes are always paid with the return.
