Heirs facing stricter withdrawal deadlines may owe more to the IRS than expected.
IRVINE, CALIFORNIA / ACCESS Newswire / September 22, 2025 / The Internal Revenue Service (IRS) is reminding taxpayers that inheriting a retirement account, such as an IRA or 401(k), could come with new and often unexpected tax obligations. Changes under recent federal rules now require most non-spouse beneficiaries to withdraw inherited funds within ten years - a move that could accelerate taxable income and lead to larger IRS bills.
Financial experts say many heirs mistakenly assume inherited retirement accounts are tax-free or can be left untouched for decades. In reality, the SECURE Act and subsequent IRS guidance have tightened requirements, and failure to comply can result in costly penalties.
"Beneficiaries often don't realize that an inherited IRA is treated very differently than one they opened themselves," said a spokesperson for Clear Start Tax. "If you don't take the right withdrawals on schedule, you could face both unexpected income tax and additional IRS penalties. Reviewing the rules early can save thousands."
Clear Start Tax notes that planning ahead is especially important for retirees passing wealth to children or grandchildren. "We're encouraging families to talk about these rules before a loved one passes," the spokesperson added. "It's not just about protecting the inheritance - it's about avoiding a surprise tax bill that could wipe out much of the benefit."
Tax professionals recommend beneficiaries carefully review IRS distribution timelines, consider strategies to spread withdrawals over multiple years, and seek professional guidance before making major decisions.
By answering a few simple questions, taxpayers can find out if they're eligible for the IRS Fresh Start Program and take the first step toward resolving their tax debt.
About Clear Start Tax
Clear Start Tax is a trusted tax relief company dedicated to helping individuals and families resolve back taxes, navigate IRS programs, and protect themselves from enforcement actions. With a client-focused approach, the firm provides education and personalized solutions to reduce financial stress and achieve lasting tax relief.
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SOURCE: Clear Start Tax
View the original press release on ACCESS Newswire:
https://www.accessnewswire.com/newsroom/en/business-and-professional-services/irs-says-inherited-retirement-accounts-could-mean-new-tax-bills-1071646
