Inheritance: How the Tax Authority Handles Errors
As part of the probate process, it is important to consider the possibility that the tax authorities may conduct a thorough review of your tax return, which could result in an adjustment to the tax owed if an error is found.
In accordance with current regulations, the tax authorities have until December 31 of the sixth year following the decedent’s death to conduct such an audit. Similarly, an heir has the right to request a tax audit if he or she believes he or she has been treated unfairly, within a maximum of three months from the date the inheritance tax return is filed.
During these audits, the tax authority reviews the tax return to verify that all of the decedent’s assets have been correctly listed and valued. If an omission, deficiency, or error is found, the authority then has until December 31 of the sixth year following the death to make the necessary corrections. If a “flagrant irregularity” is identified, the audit deadline is moved up to December 31 of the third year following the year the return was filed.
It is important to note that heirs have the option to accept or challenge the tax authority’s proposed adjustment by filing a complaint or initiating an out-of-court appeal.
Furthermore, it should be noted that heirs also have the right to request a tax audit on their own, particularly in the event of a disagreement with the other heirs regarding the valuation or distribution of the decedent’s estate. However, in order to submit a request for an audit to the tax authorities, the heir’s share of the estate must represent at least one-third of the declared net assets—either individually or jointly with the other petitioners—according to the information provided on the tax authority’s official website.
It should be noted that the deadline for requesting this review is three months from the date the estate tax return is filed. A sample letter is available online to facilitate this process. Upon receipt of this request, the tax authority has one year to correct the return.
