The cliché of death and taxes is manifested for the surviving family legacy for tax purposes through the use of Internal Revenue Service (IRS) Form 56. So, what is IRS Form 56? This tax form is used to provide proof of authorization to address and resolve the remaining tax issues after a loved one has passed away.
The power of a representative of who is in an authorized representative of a late loved one’s estate, trust, or individual intestate IRS tax liabilities is normally thrust upon someone as a surprise after the passing of a loved one.
While there are circumstances where there are remaining tax debts when a loved one passes with a will or trust, those circumstances are usually planned for based on the strategies that were memorialized in a will or trust.
But often, when people pass away with a lingering tax debt, they didn’t have the means to properly plan for their passing, and after they pass, a loved one receives a letter from the IRS. But, because of the lack of a will, trust, and an operative tax Form 56, the loving family member likely needs to file an IRS Form 56 to obtain access to their loved one’s IRS tax debt account.
Unfortunately, the IRS currently has a diminished “front line” and lacks understanding of fiduciary tax, trust tax, and intestate tax issues to communicate the lingering issues or address the lingering issues that are usually not communicated to the surviving family. And frustrations brews. There are collection options available for families finding themselves looking at an IRS collection notice for a recently lost family member, and only to hear from the IRS that they need to file an IRS Form 56.
IRS Form 56 matters are complicated and stressful, and the IRS often does not understand its own rules. Feel free to contact Montgomery & Wetenkamp for a free consultation if you need assistance.
Contribution By Farah Oweimer; Email: Farahoweimer@gmail.com