I am finalizing my parents' tax returns for 2018, the year they died. My father was ill and seriously messed up his 2017 return, and when the IRS got done re-calculating it for him, they sent me (i.e., his estate) a letter saying he had a $499 refund. I thought the best way to deal with this was to have it applied to their 2018 taxes, and tidy everything up at the same time. In the meantime, I had also made estimated payments to avoid penalties.
It took about a year for me to get authorized as his fiduciary with the IRS, and every time I called them to try and track this refund, I had to explain the whole thing over again. Eventually, an agent "filled out the form" to request having the refund applied to 2018. I figured to wait until this amount posted to their account before filing their 2018 return.
Multiple followup calls found no updates on this, until finally the IRS stopped answering calls due to the COVID shutdown. I (the estate) just got a letter advising there is a credit on file for their account. The amount in the letter is the total of the estimated payments I made, but does NOT include that $499 refund.
So, as I fill out the tax forms now, should I assert tax payments only in the amount they show in their letter, or should I add the $499 to that amount? Either way the potential for bureaucratic confusion exists. Incidentally, they're due a 2018 refund because of other recalculation issues, the only question is where I should account for the extra $499.
