IRS Form 56: Instructions & Overview
Form 56 is filed with the IRS at the beginning and end of a fiduciary relationship — one where one person is responsible for the assets of another. Form 56 must also be filed whenever a fiduciary relationship changes. Filing IRS Form 56 notifies federal agencies and creditors to send mail regarding the estate to the fiduciary. The main purpose of this form is to establish the trustee or fiduciary as responsible for the accounts of an estate. Let’s go over more details, including IRS Form 56 instructions.
Form 56 Important Definitions
- Fiduciary A fiduciary is any person in a position of confidence acting on behalf of any other person. A fiduciary assumes the powers, rights, duties, and privileges of the person or entity on whose behalf he or she is acting.
- “Person” A person, in this case, is an individual, trust, estate, partnership, association, company, or corporation.
- Decedent’s Estate A decedent’s estate is a taxable entity separate from the decedent that comes into existence at the time of the decedent’s death. Basically, it’s what they leave behind.
Do I Need to File Form 56?
If you are a guardian, trustee, administrator, or another person responsible for a decedent’s estate, you are required to file Form 56. If there are multiple trustees for one estate, each trustee will be required to file IRS Form 56. A single Form 56 only establishes one relationship between a trustee and an estate. If there are multiple estates, the trustee will be required to file a separate Form 56 for each estate that they plan to be the trustee of. When filing Form 56, the trustee must verify whether or not the decedent had a valid will and list at the time of death.
A bankruptcy trustee, assignee, and receiver can also file Form 56. The trustee must include the date that the court assigned the assets on Form 56. This will show that the trustee is qualified to manage the debtor’s assets. A trustee can file on behalf of the bankrupt individual or company, but a separate form must be filed for each one.
IRS Form 56 Instructions
In order to file Form 56, you will need to get a copy of the form from the IRS or a tax professional. The form will be filed directly with the IRS, and it is the responsibility of the fiduciary to file in a timely manner after the establishment of fiduciary duties.
The first step in filling out the form is providing information on the decedent. If you are acting on their behalf, enter the decedent’s SSN or ITIN shown on his or her final Form 1040. If you are acting on behalf of the decedent’s estate, you will need to fill in the information from their final Form 706. Include the decedent’s suite, room, or other unit numbers after the street address.
Lines 1a.-1f. will be a list of boxes to check that will determine the various roles that the fiduciary will take on and other details about the estate and decedent. Line 2 will specify the date of death and date of appointment to transfer assets. Lines 3 and 4 specify the tax forms that will be included with tax Form 56.
As the fiduciary, you will need to sign Form 56 and enter a title describing your role as a fiduciary. The following are the various roles that a fiduciary can assume:
- Personal Representative
Form 56 and Form 56 instructions can be found on the IRS website. You can also contact a tax professional such as a tax attorney or CPA to handle your Form 56 filing.
Where to Mail IRS Form 56
Form 56 can be mailed directly to the IRS department in your state. A tax professional can help you find the address of your state’s office, or you can find out the closest one online by visiting the IRS.gov website. Because of the amount of signed documentation that is typically required with Form 56, you will likely be unable to take advantage of the Paperwork Reduction Act and file any of Form 56 online. When you do mail in IRS Form 56 to file, make sure that you have all the required documentation listed on Form 56.
The IRS Form 56 notice concerning fiduciary relationship may seem confusing, don’t hesitate to seek out professional tax help. Filing Form 56 can be a complicated process—the qualified tax experts at Community Tax can assist you with all of your filing questions and needs.