Estate Planning

Helping Elderly Parents in Dealing with the IRS

By Greg Herman-Giddens

Brian Dooley, CPA in his International Tax Counselor's Blog, recently authored a helpful post on the use of IRS Form 56, Notice Concerning Fiduciary Relationship, for helping aging parents and others manage any issues that arise with the IRS.  Form 56 is traditionally used for fiduciaries such as executors and trustees, but it can also be used to name children who will be helping their parents in the future.

Since children are not automatically fiduciaries for their parents, the person named as the fiduciary in Form 56 must be named as an agent in a durable power of attorney, and that document must be sent in along with Form 56.

The IRS Power of Attorney, Form 2848, may also be used, and does allow an immediate family member to serve as the agent with no formal fiduciary relationship.  It may not be as useful for future tax years, however.

Of course, both forms must be signed while the tax payer is still competent.

Full post as published by North Carolina Estate Planning Blog on October 20, 2010 (boomark / email).