What Is IRS Form 43 and Who Needs to File It?

IRS Form 56, “Notice Concerning Fiduciary Relationship,” is a document used to inform the Internal Revenue Service (IRS) that a fiduciary relationship has been created or terminated. Its primary function is to ensure the IRS sends tax notices and correspondence for a specific taxpayer to the correct representative. When this form is filed, the IRS recognizes the fiduciary’s authority to handle tax matters on behalf of another person, estate, or trust, directing the flow of communication.

Determining if You Need to File Form 56

You are required to file this form if you are appointed to act in a fiduciary capacity for another taxpayer. A fiduciary is an individual or entity that manages the assets or financial affairs of another. Common examples of fiduciaries include executors of an estate, trustees of a trust, guardians, conservators, or receivers for a business. When appointed to one of these roles, you are responsible for all tax matters, including filing returns and paying taxes. This form is not used for a power of attorney, which is established using a different IRS form.

For instance, if an individual passes away, the court-appointed executor of their estate must file the form to notify the IRS of their authority. This allows the executor to receive the decedent’s tax notices and manage their final income tax return and any estate tax obligations. Similarly, a trustee would file the form to manage a trust’s tax filings. The notice should be filed when the fiduciary relationship is created.

Information and Documentation Required

To complete Form 56, you must provide information for both yourself and the person or entity you represent. This includes the full name, address, and identifying number (Social Security Number or Employer Identification Number) for both the taxpayer and the fiduciary. Part I of the form requires this identification information. In Section A of Part I, you must also describe and provide evidence of your authority, such as a certified copy of a will, trust document, or court order. If your appointment is from a court proceeding, you must provide the court’s name, the case docket number, and the appointment date.

Section B of Part I requires you to specify the nature of the tax liability and the tax years involved. You must indicate the type of tax, such as income, employment, or gift tax, that you will be responsible for handling, and you can select an option to cover all tax matters. Part III requires details of any court proceedings related to your appointment if your authority comes from a court order. If multiple fiduciaries are appointed, each is required to file a separate Form 56.

The Filing Process

Once you have completed the form, it must be submitted to the IRS. This form cannot be filed electronically and must be mailed. The correct mailing address depends on the location where the taxpayer for whom you are acting is required to file their tax returns. The instructions for the form provide a list of addresses.

Your submission package must contain the original, signed Form 56 and legible copies of any documents that prove your fiduciary authority, such as court orders or a will. It is advisable to keep a copy of the entire package for your own records before mailing.

After the IRS processes your form, it will update its records to show you as the fiduciary. From that point forward, any official correspondence, tax bills, or notices related to the specified tax matters will be sent directly to you. This ensures that important communications are not missed and that you can fulfill your duties.

Amending or Terminating the Fiduciary Relationship

A fiduciary relationship can be terminated when your duties have ended. Common circumstances that lead to termination include the closing of an estate after all assets have been distributed, the dissolution of a trust, or a court order releasing you from your duties as a guardian. Informing the IRS of this change is an important step.

To end the relationship, you must file a new Form 56. On this filing, you will complete Part II, which is for the revocation or termination of a prior notice. You will need to provide the date the relationship ended and check the box indicating that the notice is for termination. This action removes you as the responsible party in the IRS’s records.

Along with the form, you must provide evidence that your fiduciary authority has been terminated. This could be a final accounting for an estate approved by a court or a legal document showing a trust has been dissolved. Without this notification, the IRS may continue to view you as the responsible party, so filing for termination protects you from future liability.