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U.S. tax form 56 notice concerning fiduciary relationship

Tax form 56

Who must use this form?

The fiduciary (usually a trustee or an executor) of an estate or trust or a guardian should use this form to notify the IRS of the creation or termination of a fiduciary relationship. (See IRC §6903.)

Some commentators suggest that Form 56 is not a required filing, because the foreign trust's first tax return ought to provide sufficient information. (See Zaritsky, 854 TM, Foreign Trusts and Beneficiaries.) However, without the address and identity of a foreign trust, the fiduciary and trust may be bound by IRS notices sent to an incorrect address.

What information is required?

This is a one page form that requests information about the name, address and TIN of the fiduciary and of the person or entity for whom the fiduciary is acting.

When is it due?

Either when the fiduciary relationship is established or terminated or when the first fiduciary tax return is filed.

Where should it be filed?

With the IRS office where the fiduciary tax return is filed.

How long does it take to prepare?

The IRS estimates that it should take an average of 46 minutes to complete this form and 32 minutes to read the instructions and applicable law.

Why comply? (Penalties)

Although not mandatory, it is helpful to inform the IRS of the fiduciary relationship to avoid delays in communication and to receive pertinent information directly from the IRS.

Comments

The pertinent IRC sections are 6036 and 6903.

Form 56-F should be used by a financial institution such as a bank or thrift company when the financial institution is acting as a fiduciary or is terminating a fiduciary relationship.