Short Answer

In North Carolina, the personal representative must verify and, if needed, file the decedent’s final individual tax returns (IRS Form 1040 and North Carolina Form D-400) and any estate fiduciary returns (IRS Form 1041 and North Carolina Form D-407). To confirm filing, request IRS and North Carolina Department of Revenue account transcripts using your Letters and fiduciary authorization, check for Forms 1099 issued after death, and document results in the estate’s accountings with the Clerk of Superior Court. If the estate had $600 or more in gross income or made any distributions, an IRS Form 1041 and NC D-407 are generally required.

Understanding the Problem

You’re asking how, as the North Carolina personal representative, you can confirm whether the decedent’s final personal returns and any required estate returns were filed so you can administer the estate. One key fact: the SBA is pursuing a personal guarantee and the estate appears insolvent, so you need clarity on tax filings to handle claims and close the file properly.

Apply the Law

North Carolina requires a personal representative to gather information, pay valid claims (including taxes), and account to the Clerk of Superior Court. For taxes, that typically includes: a final individual federal return (1040) and state return (D-400) for the year of death; and, if the estate has gross income of $600 or more during administration or has a nonresident alien beneficiary—or if there are distributions in the fiscal year—an estate fiduciary return (IRS 1041) and state fiduciary return (D-407). The estate needs its own EIN. Federal returns are filed with the IRS; state returns are filed with the NC Department of Revenue. Annual and final estate accounts are filed with the Clerk of Superior Court.

Key Requirements

• Fiduciary authority and duty: Qualify as personal representative, keep records, and settle the estate, including tax compliance and accounting.
• Identify required returns: File the decedent’s final 1040/D-400 for the year of death; file 1041/D-407 for the estate if it has $600+ gross income, a nonresident alien beneficiary, or if distributions occur in the fiscal year.
• Set up the estate properly: Obtain an EIN (IRS Form SS-4) and put the estate’s EIN on any income-producing accounts; notify the IRS of your fiduciary role (Form 56).
• Verify filings: Request IRS and NC DOR account transcripts using your Letters; review wage/income documents (e.g., 1099s, 1099-C) issued after death to determine if filings are needed.
• Account to the Clerk: Show payment or confirmation of tax obligations in your annual/final account filed with the Clerk of Superior Court by the required due dates.

What the Statutes Say

• North Carolina Gen. Stat. § 28A-13-2 (Duties of personal representative) – General duty to settle the estate, which includes handling taxes and claims.
• North Carolina Gen. Stat. § 28A-21-1 (Annual accounts) – Annual accounts are due on a set timetable if the estate remains open.
• North Carolina Gen. Stat. § 28A-21-2 (Final account) – Sets the timing for filing the final account and closing the estate.

Analysis

Apply the Rule to the Facts: Because the SBA is pursuing a personal guarantee and the estate appears insolvent, you need to verify whether the decedent’s final 1040/D-400 were filed and whether the estate must file 1041/D-407. Request IRS and NC DOR transcripts using your Letters and fiduciary authorization, and review any 1099s issued after death. If a 1099-C for cancellation of debt was issued after death, that may trigger estate-level income (reported on 1041/D-407) depending on timing and the TIN used.

Process & Timing

1. Who files: Personal representative. Where: IRS and NC Department of Revenue; estate accounts with the Clerk of Superior Court in the county of administration. What: IRS Form 56 (notice of fiduciary), IRS Form SS-4 (EIN), IRS transcripts request (e.g., Form 4506-T) and NC DOR transcript/verification request, IRS Form 1040/1041, NC D-400/D-407, extension forms (IRS 7004 for 1041; NC D-410P for D-407). When: 1040/D-400 due by April 15 of the year after death; 1041/D-407 due by the 15th day of the fourth month after the estate’s fiscal year ends; extensions available.
2. Request IRS and NC DOR account transcripts using your Letters and fiduciary authorization; allow a few weeks for processing. In parallel, gather wage/income forms (W-2, 1099, 1099-C) and bank statements to determine filing needs.
3. File any missing returns or extensions, pay taxes from estate funds as available, and reflect filings and payments in the annual or final account with the Clerk. After closing, notify the IRS of termination of the fiduciary relationship.

Exceptions & Pitfalls

• Even with little or no estate income, returns are generally required in any fiscal year the estate makes distributions to beneficiaries.
• IRS and NC DOR will not release taxpayer information without proper authority; ensure you have Letters and that a fiduciary notice (and, if needed, a power of attorney) is on file.
• Watch for cancellation-of-debt income (1099-C). Timing and the TIN used (decedent SSN vs. estate EIN) drive whether income belongs on the 1040 or 1041.
• Insolvent estates must handle tax claims carefully. Do not distribute to lower-priority creditors or heirs before resolving federal and state tax obligations.
• Missing filing deadlines increases penalties and interest; file extensions promptly if you need more time.

Talk to a Probate Attorney

If you’re dealing with unclear tax filings for a North Carolina estate and need to verify, file, or coordinate with the IRS and NC DOR, our firm has experienced attorneys who can help you understand your options and timelines. Call us today at 919-341-7055.

Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.