They got a very chaokah tactic of suka suka freezing your bank account.
The process is more complicated than this.
Read carefully the language used in the demand letter ..." from the estate of xxx". While not directly asking some relative to pay the outstanding tax personally, the demand is asking the personal representative, or executor of the estate or the administrator of the estate to pay the outstanding amount 'from the estate'. If the representative is currently holding enough money belonging to the deceased, it is just a matter of going to the IRAS and paying off the outstanding tax. If there is no or not enough money for the outstanding tax, then simply reply that there is no or not enough money to pay the outstanding tax.
So easy??....NYET!!!
Because when the representative of the estate go ahead to handle the estate by applying for either a letter of administration (deceased died without will) or probate (decease died with a valid will) and when all dusts are settled by the court in 6 to 12 months time and a letter of administration or probate has been issued, there will be a surprise awaiting. The representative will find that the money from the estate cannot be made available immediately for distribution because of an outstanding tax not paid. Yes, the bank account of the estate will be 'frozen'!!!
So, the simplified process to handle this is to write to IRAS and say representative now in process to apply for letter of administration or probate. The amount cannot be paid yet as deceased estate does not have enough money at the moment. The outstanding tax will be paid when the money is available in the deceased bank account 6 to 12 months later. When this happens, then, go to the IRAS to inform them that estate funds are now available and please 'unfreeze' the bank account. If this is successful, use the money from the account to pay off the outstanding tax and any other known and officially lodged outstanding estate debts. Only then can the remainder of estate money be distributed. Please expect the to and fro process between the IRAS, the bank, the other estate creditors, the Official Assignee, etc to take some more months.
Handling this really taxes one's patience with lots of delays. Some monkeys involved in the process may also throw in some wrenches here and there and delay the process ... for example, one party (say the bank) awaiting for IRAS reply to release the money, no reply, no action, or IRAS officer handling case is on long leave, etc, etc. Typically, each person awaiting or taking his own sweet time to take action because the money is 'see lang' money, so can wait!!!
Final advice. If representative of the estate or some other relative is in need of the available money from the estate it is best for the representative to take his or her own initiative and get the process going. Sometimes the representative may need to plod some lazy bum to take some action (for example a reply, etc). In complicated or challenged estates (some relative does not agree with the will or put up some other challenges), the services of a lawyer may even be needed.
OK then, personal representative of the estate, since you take on this task, go and do the job with more than a pinch of sugar and salt. Remember of smile
when monkeys start throwing wrenches!!!