Form 56, etc.

Technical topics regarding tax preparation.
#1
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So, just got off the phone with absolutely the most rude IRS agent I have every spoken with! :evil: In the past, I have been able to send a POA signed by the executor, along with the Letters Testamentary and a copy of the death certificate in order to get information on the deceased's account. It was a no go with this agent - which was fine - but he would not clarify ANYTHING since no Form 56 was on file.

I faxed him all of the above items, and was trying to get a wage and income transcript, which was listed on the POA. Now, I need to prepare a Form 56 and mail it in. My question is basically do I need to resubmit the POA, and if so, can I send it with the Form 56. Why he could not answer this question is beyond me!! Does anyone know? Also, does anyone have a clue as to how long it takes to have a Form 56 processed these days?
 

#2
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If you have POA you do not need to file Form 56. The instructions for Form 56 clearly say that Form 2848 is the authorization needed in your case. You should call back and get a more knowledgeable agent.
 

#3
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It is not the CPA who needs to file the Federal Form 56.

It is the executor of the Estate that needs to file Form 56 to provide notice to the IRS of their fiduciary relationship giving them the authority to sign line 7 of Federal Form 2848 providing the tax representative the authority to request the information your are requesting.

Also, if you are going to change the address of the person you will be representing (the decedent) on Form 56 from the address used on their last filed tax return (1040), you'll also need to include a completed Federal Form 8822 - Change of Address with the Form 56 or the Form 56 will be rejected.

FYI - mail everything certified mail/return receipt. Can not provide you with how long it will take for the IRS to process Form 56. Give it at least 30 days and then give the IRS a call. If it has not been processed, they will let you know. If you tell them everything has been filed and you can provide proof of mailing, they may accept all of this faxed to them and provide you at that time the wage & income transcript. Otherwise, give it another 30 days and call back.

Historically, I wait 30 days after Form 56 has been received before I fax Form 2848 to the IRS. By the time they process the POA, Form 56 has always been processed and I have been good to go.
 

#4
MilesR  
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The executor can't authorize you with a POA for the DECEDENT unless they themselves have been reported on a form 56 to the IRS so that the IRS knows this person is authorized as the representative for the decedent and is therefore authorized by the IRS to give someone else (you) a POA for the decedent. Otherwise the IRS has no proof that this "executor" is even real and has any authority over this trust, regardless of what state law documents you provide. The IRS has their own structure for POA that is different from typical state law. For instance, a typical POA drafted by an attorney under state law is not the same as a 2848 to the IRS and they won't honor it. Their protocol calls for certain forms and filings unfortunately.

It's easiest to attach a PDF of the form 56 to the 1041 e-filing, but if the return has already been filed then paper it is and the IRS has been horrendously slow on processing anything paper.
 

#5
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Dave, I do not think the Form 56 instructions are very clear on this. However, I do know that I have not had to have the Form 56 in the past in order to pull a transcript on a deceased person.

Michaelstar, I understand that it is the executor that needs to file the Form 56, which basically authorizes him to sign the POA. I was wondering if I could file the Form 56 and the POA together and they would process them both, then automatically mail the transcript to me. It is almost impossible to get through on the phone to the IRS and really don't want to have do it again if I can just mail everything together and receive the transcript within 10 days o them processing it. Thanks for the heads up about the mailing address!

MilesR, I understand that the IRS has different rules regarding POA's than an attorney's POA. However, I thought that if a representative was appointed by the court, they could use that. When there is a refund on a return, if there is a personal representative appointed by the court, you are required to attach a copy of the court certificate to the tax return. I have never had to file a Form 56 for that. This is actually for a 2021 Form 1040. The taxpayer passed away in 2022, before the return was filed and we are trying to gather the information.

Thank you for all of the feedback. I guess my additional questions are:
1. Do you normally file a Form 56 for all taxpayers that die?
2. If you have co-personal representatives, are you required to file a Form 56 for each one?
 

#6
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"1. Do you normally file a Form 56 for all taxpayers that die?"

Have filed Federal Form 56 for all executors/Trustees 100% of the time. Do believe this is a necessary initial step.

"2. If you have co-personal representatives, are you required to file a Form 56 for each one?"

Only file Form 56 for the fiduciary who will be listed/signing the returns as well as signing the POA. To keep things simple, it is probably best to keep this to a single individual so as not to confuse the IRS.

Yes, understand that currently it takes an act of congress to get through on the phones so you can always just check e-services in Friday mornings to confirm if you have access. Expect 60 days minimum for the POA to be processed. Form 56 should be processed in less time but have never tracked that.

Have never mailed a Form 2848 in with the Form 56 but you can give this a try and post back as to how it worked. Do not see any reason why is should not.
 

#7
TheGrog  
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In my experience form 56 was not always required (regarding 1041s) unless the agent you are talking to makes a point of it, but more of them are doing so, or unless the trustee/executor/administrator has changed from the first return. Even then the IRS will generally take any 1041 you send regardless of who signed it. It's only if you have to ask questions that form 56 (may) become an issue.

Demanding a 56 on file is what they should be doing, though.

We generally don't have problems with the final 1040 so I don't know how important it is there.

The online POA submission tool is pretty quick these days but I'm not sure if it works for estates, trusts, and decedents.
 

#8
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So, I'm not currently signed up for e-services, so everything will need to be done by mail or fax. I've always had issues with e-services, so finally gave up. I guess I will begin preparing more Form 56's going forward. Do you usually prepare them up-front so they are on file when you need them, or do you usually wait and just file them with the tax return?

Also, it appears that you need a separate one for both the deceased individual taxpayer and the estate of the individual. Where it asks if your authority as a fiduciary does not cover all years or tax periods, do you usually check the box and list the years beginning with the year of death?

Grog, this agent was "demanding" a 56 be on file. He would not let me finish a sentence; kept interrupting me to say I needed to have a Form 56 on file. I don't think I was ever able to ask a complete question or make a complete statement. I was getting so mad I finally just interrupted him and said thank you, goodbye.
 

#9
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"Do you usually prepare them up-front so they are on file when you need them, or do you usually wait and just file them with the tax return?"

This is one of the first tasks I do. Send it out (envelope already prepared cert mail/return receipt so there are no screw ups) with the tax engagement letter on day one. Also provide a second copy to the client to return to me so I have a signed copy to fax to IRS when requested. Filing a Form 56 is very important so there is no reason to delay this task. For that reason, I have never had to filed a Form 56 with a tax return.

"Also, it appears that you need a separate one for both the deceased individual taxpayer and the estate of the individual.:

Correct. File the Form 56's (and all associated paperwork) in different envelopes. Have never been a fan of combining forms for different taxpayers in the same envelope. Others feel different but that just not how I conduct my practice.

Signed up for e-services so long ago that I do not remember if there were issues but if any, nothing large. Utilize e-services to track things on a regular basis. Very simple to pull account transcripts w/out having to call IRS which at least for now has been frustrating since "they" are so busy...... The IRS agent was just doing their job - they have rules they have to follow.
 

#10
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All I can say is that most executors have no idea about filing Form 56 and to my knowledge I do not know of a client I have had who is serving as executor who has filed one. A 2848 has always been sufficient. Maybe I've just been lucky. I would still call back and talk to another agent.
 

#11
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Thank you for the detailed reply Michaelstar. My clients are getting older and I am running into more deaths recently. I may adopt your procedure going forward. In the past 30 years or so, I have only filed probably a couple of Form 56's because I have never had a need to. I guess things are changing. For the record, I do understand the IRS has rules to go by and I am fine being told that I need to file a certain form. However, the whole attitude of the agent, and the fact when I tried to ask a question he cut me off every time and would not let me proceed, was very rude and uncalled for (for example, I was going to ask if they were currently accepting Form 56 by FAX, as I have read that the change is being implemented. Two to three words in, he interrupted and said I needed to File a Form 56, etc. I was also trying to ask if I could file the Form 56 and the POA together and he cut me off the same way. Every time I opened my mouth, he interrupted me and was raising his voice at me. I have never, in over 30 years, had an agent act anything like this one did.

Dave1040, I'm almost afraid to call back. I'm scared he put something in the computer regarding our conversation. I almost lost it with him (but hung up first), I don't want to push my luck with someone else.
 

#12
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Form 56 is required. You were asking the IRS employee to do something against procedure/a fireable offense and the situation escalated.

From the instructions:
“Name. File a separate Form 56 for each person for whom you are acting in a fiduciary capacity. For example, if you will be filing the decedent’s final Form 1040 and are the executor/administrator of the decedent’s estate, file one Form 56 entering the name of the decedent as the person for whom you are acting and file one Form 56 entering the name of the estate as the name of the person for whom you are acting.”

Agree with Michaelstar about Form 56 procedure, that is a very professional way to do it.
 

#13
NOVATax  
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Don't know if this thread is buried in the back, though will post the question anyway.

Need to obtain wage and income transcript for deceased spouse to file back years tax returns.

The information about the Form 56 in the previous posts seems straightforward. It appears the surviving spouse needs to file this before they can sign the POA to allow me to pull the transcript?


The question is about Section A. Should the surviving spouse check Line 1 box g Other - if there was a will and not filing an estate return.
 


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