Who signs?

[Margaret CPA in OH]

Client, 96, in nursing home, wife in late stages of Alzheimer's. Son has durable POA for father/client but not for wife. Father/client had that but now is also incapacitated.

This will be paper filed but who signs? In the past I have sent copy of wife's POA to husband as he signed for her.

Thanks

[jklcpa]

ATX has a tab on the 1040 for explanation of signature. What I would do is this:

Check the box for the spouse, the wife in this case, and

from the drop down box choose "injury or disease prevents signing" and fill in the date it will be signed

reason is: "(name of spouse) has been diagnosed with and is living in a full-care facility due to Alzheimer's disease and other physical ailments. Her cognitive and physical limitations prevents her from signing the 2013 tax returns."

Because this explanation was designated as being for the spouse, ATX will put the father's name under a signature line on that page. Son should sign with his name and indicating POA.

On pg 2 of the 1040, son signs for the father as having POA, and attach the POA.

and on the spouse's line, enter "see explanation for no signature"

I had this explanation attached to a couple's returns for many years because the husband was in a home for Alzheimer's patients. Wife signed that statement each year and it was never questioned. I did eventually start e-filing the return, but it was paper filed with the statement for a few years too.

[Margaret CPA in OH]

Thanks, Judy, but how could you have efiled? Wife signed a statement that you kept in your file or sent with 8453?

[jklcpa]

Yes, the wife signed the statement and I kept it in my file along with a copy of the POA, and she signed the 8879 for both of them. Maybe that wasn't entirely correct, but she had the authority to sign for herself and for her husband with the statement and the POA.

[Margaret CPA in OH]

So maybe the son vicariously can sign for mom and as POA sign for dad? He is in AZ, parents are in OH. Efile would just be easier, if possible.

[jklcpa]

Margaret, while this snip is from the IRS pub 947 Practice before the IRS, it talks about POAs, perfecting non-tax POAs, and when the IRS will allow a non-tax POA representative to sign a form 2848 on behalf of a client.

Maybe the part about perfecting a non-tax POA and the example at the bottom will help you figure out your situation.

Here's that section:

What Is a Power of Attorney?

A power of attorney is your written authorization for an individual to act on your behalf. If the authorization is not limited, the individual generally can perform all acts that you can perform. The authority granted to a registered tax return preparer or an unenrolled preparer is limited. For information on the limits regarding registered tax return preparers, see Circular 230 §10.3(f). For information on the limits regarding unenrolled preparers, see Publication 470.
Acts performed. Any representative, other than a registered tax return preparer or an unenrolled return preparer, can usually perform the following acts.

Represent you before any office of the IRS.

Sign an offer or a waiver of restriction on assessment or collection of a tax deficiency, or a waiver of notice of disallowance of claim for credit or refund.

Sign a consent to extend the statutory time period for assessment or collection of a tax.

Sign a closing agreement.

Signing your return. The representative named under a power of attorney is not permitted to sign your income tax return unless:

The signature is permitted under the Internal Revenue Code and the related regulations (see Regulations section 1.6012-1(a)(5)).

You specifically authorize this in your power of attorney.

For example, the regulation permits a representative to sign your return if you are unable to sign the return due to:

Disease or injury.

Continuous absence from the United States (including Puerto Rico) for a period of at least 60 days prior to the date required by law for filing the return.

Other good cause if specific permission is requested of and granted by the IRS.

When a return is signed by a representative, it must be accompanied by a power of attorney (or copy) authorizing the representative to sign the return. For more information, see the Form 2848 instructions.

Limitation on substitution or delegation. A recognized representative can substitute or delegate authority under the power of attorney to another recognized representative only if the act is specifically authorized by you on the power of attorney.

After a substitution has been made, only the newly recognized representative will be recognized as the taxpayer's representative. If a delegation of power has been made, both the original and the delegated representative will be recognized by the IRS to represent you.

Disclosure of returns to a third party. Your representative cannot execute consents that will allow the IRS to disclose tax return or return information to a third party unless you specifically delegate this authority to your representative on line 5 of Form 2848.

Incapacity or incompetency. A power of attorney is generally terminated if you become incapacitated or incompetent.

The power of attorney can continue, however, in the case of your incapacity or incompetency if you authorize this on line 5 “Other” of the Form 2848 and if your non-IRS durable power of attorney meets all the requirements for acceptance by the IRS. See Non-IRS powers of attorney, later.

When Is a Power of Attorney Required?

Submit a power of attorney when you want to authorize an individual to represent you before the IRS, whether or not the representative performs any of the other acts cited earlier under What Is a Power of Attorney.

A power of attorney is most often required when you want to authorize another individual to perform at least one of the following acts on your behalf.

Represent you at a meeting with the IRS.

Prepare and file a written response to the IRS.

Form Required

Use Form 2848 to appoint a recognized representative to act on your behalf before the IRS. Individuals recognized to practice before the IRS are listed under Part II, Declaration of Representative, of Form 2848. Your representative must complete that part of the form.
Non-IRS powers of attorney. The IRS will accept a non-IRS power of attorney, but a completed Form 2848 must be attached in order for the power of attorney to be entered on the Centralized Authorization File (CAF) system. For more information, see Processing a non-IRS power of attorney, later.

If you want to use a power of attorney document other than Form 2848, it must contain the following information.

Your name and mailing address.

Your social security number and/or employer identification number.

Your employee plan number, if applicable.

The name and mailing address of your representative(s).

The types of tax involved.

The federal tax form number.

The specific year(s) or period(s) involved.

For estate tax matters, the decedent's date of death.

A clear expression of your intention concerning the scope of authority granted to your representative(s).

Your signature and date.

You also must attach to the non-IRS power of attorney a signed and dated statement made by your representative. This statement, which is referred to as the Declaration of Representative, is contained in Part II of Form 2848. The statement should read:

I am not currently under suspension or disbarment from practice before the Internal Revenue Service or other practice of my profession by any other authority,

I am aware of the regulations contained in Circular 230,

I am authorized to represent the taxpayer(s) identified in the power of attorney, and

I am an individual described in 26 CFR 601.502( b )

Required information missing. The IRS will not accept your non-IRS power of attorney if it does not contain all the information listed above. You can sign and submit a completed Form 2848 or a new non-IRS power of attorney that contains all the information. If you cannot sign an acceptable replacement document, your attorney-in-fact may be able to perfect (make acceptable to the IRS) your non-IRS power of attorney by using the procedure described next.

Procedure for perfecting a non-IRS power of attorney. Under the following conditions, the attorney-in-fact named in your non-IRS power of attorney can sign a Form 2848 on your behalf.

The original non-IRS power of attorney grants authority to handle federal tax matters (for example, general authority to perform any acts).

The attorney-in-fact attaches a statement (signed under penalty of perjury) to the Form 2848 stating that the original non-IRS power of attorney is valid under the laws of the governing jurisdiction.

Example.

John Elm, a taxpayer, signs a non-IRS durable power of attorney that names his neighbor and CPA, Ed Larch, as his attorney-in-fact. The power of attorney grants Ed the authority to perform any and all acts on John's behalf. However, it does not list specific tax-related information such as types of tax or tax form numbers.

Shortly after John signs the power of attorney, he is declared incompetent. Later, a federal tax matter arises concerning a prior year return filed by John. Ed attempts to represent John before the IRS but is rejected because the durable power of attorney does not contain required information.

If Ed attaches a statement (signed under the penalty of perjury) that the durable power of attorney is valid under the laws of the governing jurisdiction, he can sign a completed Form 2848 and submit it on John's behalf. If Ed can practice before the IRS (see Who Can Practice Before the IRS, earlier), he can name himself as representative on Form 2848. Otherwise, he must name another individual who can practice before the IRS.
Processing a non-IRS power of attorney. The IRS has a centralized computer database system called the CAF system. This system contains information on the authority of taxpayer representatives. Generally, when you submit a power of attorney document to the IRS, it is processed for inclusion on the CAF system. Entry of your power of attorney on the CAF system enables IRS personnel, who do not have a copy of your power of attorney, to verify the authority of your representative by accessing the CAF. It also enables the IRS to automatically send copies of notices and other IRS communications to your representative if you specify that your representative should receive those communications.

You can have your non-IRS power of attorney entered on the CAF system by attaching it to a completed Form 2848 and submitting it to the IRS. Your signature is not required; however, your attorney-in-fact must sign the Declaration of Representative (see Part II of Form 2848).

[jasdlm]

Hi, Margaret. I'm not sure that the above applies when the son doesn't actually have even a non-IRS power of attorney for the wife. Two suggestions, one easy, one you won't want to hear.

1) Check Father's power of attorney for Wife toward the end of the document. He might have named an alternate, in which case, son has POA simply by having a doctor (or 2 depending on your state) certify disability.

2) When no POA exists, a Court order is usually required to appoint a Conservator to perform financial functions. (I knew you wouldn't like this one.)

Unless there is something I'm missing, I do not see how Son can sign without POA or being appointed Conservator. The explanation Judy posts requires either a 2848 Power of Attorney or a Non-IRS POA. In limited instances, a spouse can sign, but I don't believe it applies to the POA of a spouse.

See the following: cfr 26 Section 1.6012-5

(5) Returns made by agents. The return of income may be made by an agent if, by reason of disease or injury, the person liable for the making of the return is unable to make it. The return may also be made by an agent if the taxpayer is unable to make the return by reason of continuous absence from the United States (including Puerto Rico as if a part of the United States) for a period of at least 60 days prior to the date prescribed by law for making the return. In addition, a return may be made by an agent if the taxpayer requests permission, in writing, of the district director for the internal revenue district in which is located the legal residence or principal place of business of the person liable for the making of the return, and such district director determines that good cause exists for permitting the return to be so made. However, assistance in the preparation of the return may be rendered under any circumstances. Whenever a return is made by an agent it must be accompanied by a power of attorney (or copy thereof) authorizing him to represent his principal in making, executing, or filing the return. A form 2848, when properly completed, is sufficient. In addition, where one spouse is physically unable by reason of disease or injury to sign a joint return, the other spouse may, with the oral consent of the one who is incapacitated, sign the incapacitated spouse's name in the proper place on the return followed by the words “By __________ Husband (or Wife),” and by the signature of the signing spouse in his own right, provided that a dated statement signed by the spouse who is signing the return is attached to and made a part of the return stating:

(i) The name of the return being filed,

(ii) The taxable year,

(iii) The reason for the inability of the spouse who is incapacitated to sign the return, and