IRS Form 56 Tax Help

Tax Help with Form 56

Need tax help with IRS Form 56? Form 56 is used to notify the IRS of the creation or termination of a fiduciary relationship. A fiduciary is any person in a position of confidence acting on behalf of another person. A fiduciary is treated by the IRS as if he or she is actually the taxpayer. Common examples of fiduciaries include executors, guardians, conservators, and trustees of a trust. All these examples necessitate the filing of Form 56.

Filing Form 56 is different than filing Form 2848 Power of Attorney. A fiduciary is treated as if they were the taxpayer and have all the powers and abilities of the Taxpayer once the IRS is notified of this relationship via Form 56. A representative is treated as an agent of the taxpayer and is only permitted to perform the actions explicitly authorized in Form 2848.

As a tax practitioner, my most common interaction with Form 56 involves obtaining information about tax accounts for deceased taxpayers. When a taxpayer dies he can no longer sign a Form 2848 Power of Attorney form (for obvious reasons) so I do not have authority to call the IRS and ask questions about his tax account. Even if I had an active Form 2848 Power of Attorney while the taxpayer was living it expires the moment the taxpayer passes away as opposed to a Form 56 which does not expire. To have authority to contact the IRS on the deceased taxpayer’s behalf I need his fiduciary (usually the executor of the estate) to sign the Form 2848 Power of Attorney for him. The fiduciary needs to file Form 56 to alert the IRS of the fiduciary relationship and give the IRS notice that he can sign for the deceased taxpayer. Only then can I call the IRS and obtain information on balances, unfiled returns, liens, and other topics.

Filing Form 56 would be similarly necessary if a taxpayer was unable to sign IRS tax returns due to death or incapacitation. After filing Form 56 the fiduciary could sign the returns on the taxpayer’s behalf.

If you think you may need tax help to file Form 56 contact Community Tax today for a Free Consultation, or fill out the contact form.