Charitable Trust Penalty

Forum|Forum|9 months ago
September 30, 2025
2 replies
9 views

Hello,

I have an elderly client with a Charitable Trust that her son manages, however, she is still the trustee. She received a penalty letter from the IRS (over 10k) from an apparent lack of some filing from 2021. She was unable to tell me much more. Any ideas of questions I should be asking? p.s. She was NOT my client in 2021.

Thank you for any insight that anyone may be able to provide,

Dawn

ProSeries Professional

BobKamman

Level 15

What kind of Charitable Trust? A Charitable Remainder Trust, required to file Form 5227? How long has she been your client, and what has been filed for 2022 through 2024? (I would be waiting for those shoes to drop.) Or is at a trust that files Form 1041?

What authority does the son have to manage the trust? Generally, trust powers can't be delegated with a Power of Attorney, absent a specific provision in the trust document that permits it. Sounds like you might have a real Pandora's box that turns into a can of worms.

sjrcpa

Level 15

"Any ideas of questions I should be asking?"

A copy of the letter, to start

The more I know the more I don’t know.

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