Death can be an unpleasant subject, but every tax pro needs to be ready for the day when someone who has lost a family member walks into your office looking for help with the deceased’s taxes. You need to know what information you need, where to find it and how to report it to the IRS.
Below, you’ll find a few of the top questions from a recent webinar on the topic and their accompanying answers. If you choose to attend the on-demand version of this webinar, you’ll have access to the full recording and the entire list of Q&As.
Q: Since a fiduciary steps into the shoes of the deceased taxpayer, does it need a Form 2848, Power of Attorney and Declaration of Representative, to get tax information?
A: If they are already a fiduciary, Form 2848 shouldn’t be necessary. Instead, they’ll want to file Form 56, Notice Concerning Fiduciary Relationship.
Q: When Form 56 is filed, what documentation needs to be filed with it?
A: You don’t need to include documentation unless you checked the boxes on Lines 1a and 1b as the executor, administrator or representative of an estate who has been appointed by a court. Otherwise, it only needs to be available should the IRS ask.
Q: Can the same Form 56 be used for a decedent’s final Form 1040 and decedent’s estate Form 1041, U.S. Income Tax Return for Estates and Trusts?
A: A second Form 56 would be needed in the name of the estate.
Q: Do we normally have to file the decedent’s Form 1040 by mail?
A: The final return can be e-filed.
To learn more about preparing taxes for a deceased taxpayer, you can watch our on-demand webinar. NATP members can attend for free, depending on membership level! If you’re not an NATP member and want to learn more, join our completely free 30-day trial at natptax.com/explore.
Information included in this article is accurate as of the publish date. This post is not reflective of tax law changes or IRS guidance that may have occurred after the date of publishing. All taxpayer circumstances are different, and NATP recommends contacting research services if you have specific questions about your clients’ tax situations.