What is IRS Form 56?
Published on August 30, 2024
by Grace Lorraine Angeles
Grace Lorraine, an IRS Enrolled Agent and CPA with 13 years of expat tax experience, specializes in US tax preparation, tax planning, and tax advice for US citizens and Green Card holders living and working abroad.
Table of Contents
What is IRS Form 56 used for?
IRS Form 56 (Notice Concerning Fiduciary Relationship) is used to inform the IRS when a fiduciary is taking on or ending a role.
A fiduciary is someone who manages assets for another person or entity.
This form is important for individuals or entities managing someone else’s assets, like estates or trusts, to ensure everything is handled properly with the IRS.
Who is required to file IRS Form 56?
You need to file IRS Form 56 if you take on a fiduciary role, such as an executor, administrator, trustee, guardian, or receiver. Here are some examples:
- Executor of an Estate: If you are handling the tax matters of a deceased person’s estate, you must file Form 56.
- Trustee of a Trust: If you are managing a trust, you need to file this form.
- Guardian of an Individual: If you are appointed as a guardian, you must notify the IRS using this form.
- Receiver in a Receivership: If you are managing a business or property by court order,
Filling out IRS Form 56 involves several steps. Here’s a simple guide:
Part I: Identification
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- Enter your name, address, and taxpayer identification number (TIN).
- Provide the name, address, and TIN of the person or entity you are acting for.
Part II: Court and Administrative Proceedings
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- Indicate if the fiduciary relationship was set up by a court or other administrative process.
- Include details such as dates and case numbers.
Part III: Authority
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- Specify what type of fiduciary you are (e.g., executor, trustee, guardian).
- Indicate the date when you started or ended the fiduciary relationship.
Part IV: Signature
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- Sign and date the form to confirm that the information is accurate.
Here are a few notes to remind yourself of:
- Identification: Identify both yourself and the taxpayer or entity.
- Court and Administrative Proceedings: Provide details of any legal processes that established your role.
- Authority: State the type of fiduciary relationship and the relevant dates.
- Signature: Make sure to sign and date the form.
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When and where do you submit IRS Form 56?
It’s quite simple. When starting a fiduciary role, submit Form 56 as soon as you begin your fiduciary duties.
And when ending a fiduciary role, submit Form 56 when your fiduciary duties end, such as when the estate is settled or the trust is terminated.
Overall, there are three (3) events that trigger the need to file Form 56.
- Court Appointment: When a court appoints you as a fiduciary.
- Administrative Appointment: When you are appointed through an administrative process.
- Termination of Duties: When you are no longer serving as a fiduciary.
When do I submit Form 56?
You can send the completed Form 56 to the IRS address where you file your tax return. However, the specific address depends on your state of residence, specifically the IRS department of your state.
On the other hand, if you are submitting Form 56 along with your tax return, you can include it with the return.
Note: Do not use Form 56 if you are notifying the IRS that you are the authorized representative of the taxpayer. Instead, use Form 2848, Power of Attorney and Declaration of Representative.
What happens if I don’t file IRS Form 56?
Failing to file IRS Form 56 when required can lead to several consequences:
- Lack of Recognition: The IRS may not recognize you as the fiduciary, which can complicate managing tax matters for the estate, trust, or individual.
- Penalties: While there is no specific penalty for not filing Form 56, failing to notify the IRS can lead to complications in handling tax responsibilities and may result in penalties for late filing or errors in tax submissions.
- Communication Issues: Without Form 56, the IRS may continue to send tax notices and correspondence to the wrong person, leading to missed deadlines or unaddressed tax issues.
Can IRS Form 56 be revoked?
Yes, IRS Form 56 can be revoked. If you are no longer serving as a fiduciary, you must inform the IRS by completing a new Form 56 and indicating the termination of your fiduciary relationship.
Do I need to file IRS Form 56 if I’m acting as a trustee?
Yes, if you are acting as a trustee, you need to file IRS Form 56. Trustees are responsible for managing the assets held in a trust and ensuring that the trust complies with tax obligations.
How does IRS Form 56 interact with other IRS forms?
IRS Form 56 works with several other IRS forms to ensure comprehensive management of tax matters for the person or entity under your care. Here’s an overview:
Form 2848 (Power of Attorney)
Form 2848 allows you to appoint someone else to represent you before the IRS.
If you file Form 56 and also need someone to handle tax matters on your behalf, you might also file Form 2848 to grant them power of attorney.
Form 8822 (Change of Address)
Form 8822 is used to notify the IRS of a change in your mailing address.
If the fiduciary address changes after filing Form 56, you should file Form 8822 to update the IRS with your new address.
Form 706 (Estate Tax Return)
Form 706 is used to report the estate tax liability of a deceased person’s estate.
Executors of an estate who file Form 56 will often also be responsible for filing Form 706 to report and pay any estate taxes due.
Form 1041 (Income Tax Return for Estates and Trusts)
Form 1041 is used to report income, deductions, and credits of an estate or trust.
Trustees who file Form 56 will use Form 1041 to report the annual income of the trust and pay any taxes owed.
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