All About IRS Form 56: Notice Concerning Fiduciary Relationship

As a trustee or executor, you may be required to complete a variety of tax documents, including IRS Form 56. Keep reading to learn how this form works and why it’s so important.

What Is Form 56?

Officially referred to by the IRS as a “Notice Concerning Fiduciary Relationship,” Form 56 lets the agency know when a fiduciary relationship — one involving a legal and ethical obligation to act in the other person’s best interests — has been created or terminated according to section 6903 of the Internal Revenue Code.

Section 6903 mandates that anybody “acting for another person in a fiduciary capacity…shall assume the powers, rights, duties, and privileges of such other person in respect of a tax imposed by this title.” Essentially, this means that the established fiduciary must file necessary returns and pay any amounts owed on behalf of the taxpayer in question.

The obligations established upon filing Form 56 continue until the fiduciary relationship officially comes to an end, at which point the IRS must receive notice.

What to Include on Form 56

Form 56 should not be confused with Form 2848 — known as the “Power of Attorney and Declaration of Representative” — which notifies the IRS of authorized representatives for taxpayers.

Once you’ve determined the role of your fiduciary relationship and how it might play out in terms of filing and paying taxes, use Form 56 to provide contact information and explain the circumstances under which you’ve been granted authority to act as a fiduciary. You’ll also need to verify the nature of the tax liability and the IRS forms that will be filed.

In addition to the revocation options highlighted previously, Form 56 also includes a section for notifying the IRS of substitute fiduciaries, as well as the opportunity to provide information about related court proceedings.

If you need help with filing Form 56 or other important IRS documents, feel free to seek support from the Highland Tax Group. We’re happy to review your tax documents to ensure that all are completed and filed correctly. Contact us today to get started.