A couple of years ago my mom died and left me all alone. But since her job had just started life insurance I got a good amount from there. When I was filing my taxes this year, the IRS told me I never did my taxes for the insurance money. (Mind you I never knew I had to none told me anything) After I was done filling all the information, it said I owe the IRS money. Is there anyone out that help me figure out why I have to give the IRS for my mom's death? I cried after seen that, I don't have that kind of money laying around the backyard.
You need to go see a tax professional my friend. Something just does not sound right. Normally life insurance proceeds are a non taxable event. Go talk to someone that can evaluate your situation.