Originally Posted by Pilot2013
In south Carolina he has never owed State taxes, only Federal.
But an insolvent estate is effectively a bankruptcy but covered by the state probate rules not the federal bankruptcy law. The matter is handled by a probate judge who is a state officer. Note that in every state I have looked at it is similar to the bankruptcy code that the expenses of the administration take priority over everything, just like in bankruptcy (after all the lawyers involved need to be paid...) Most states I have looked at seem to imply that potentially up to some limit funeral expenses stand ahead of taxes. Google insolvent estates funds distribution for the state in question to get an idea of how the state handles things.
I have found an irs manual https://www.irs.gov/irm/part5/irm_05-017-013.html
see 220.127.116.11 on the page, it says specifically under section 1 "Although the Federal Priority Statute, 31 USC § 3713, does not provide for any exceptions to the Government's priority, courts have held that certain classes of claim can be paid before the tax debt. These excepted classes include administrative expenses, funeral expenses, and homestead or family allowances. "
Thus with this exception the income tax due appears to just be a bad debt to the federal government which will never be paid.
Note that if there were any medical bills they don't get paid.