Financial Glossary
Form 56 (Notice Concerning Fiduciary Relationship)
Form 56 is the IRS Notice Concerning Fiduciary Relationship, used to inform the agency that a fiduciary has taken on, or is ending, responsibility for another party's tax affairs. Executors, trustees, guardians, and similar parties file it to establish their authority to receive notices and act on behalf of an estate, trust, or incapacitated individual. It links the fiduciary to the taxpayer in the IRS's records so correspondence reaches the right person.
Problem & Application
For business owners and real estate investors, Form 56 commonly comes up when settling an estate or administering a trust that holds operating companies or rental property, situations where someone must legally step in to handle the entity's and the individual's tax filings. Filing it promptly ensures IRS notices, refunds, and audit correspondence flow to the fiduciary rather than getting lost. Skipping it can leave a fiduciary unable to resolve tax issues they're legally responsible for.
In Short
Form 56 is the procedural step that gives a fiduciary recognized authority over another party's tax matters. Filing it at the start and end of the relationship keeps IRS communication clean.