Your mother in law must file a tax return for any income she receives. If she is not competent, then someone who has a POA can file for her. A form 2848 is needed.
https://ttlc.intuit.com/community/taxes/discussion/how-to-e-file-as-a-power-of-attorney-for-incapaci...
If your mother in law owes taxes, and they are not paid, then she is subject to the same interest and penalties as anyone else. If she passes while owing taxes, the IRS can collect those taxes from her estate before the estate is distributed to the heirs.
