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Spouse needs to file a 2017 return. Sizable refund. Problem is Husband(83) went missing 2 weeks ago. His truck was found but he has not. How to file and how to sign? There is a carryover of payment from 2016 that I found.

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I don't think the time statue's would play in my favor. Interesting note was that back in 2018 when 2017 was due TP did file extension. Would that then move the date away from May 17th?

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1 hour ago, TAXMAN said:

I don't think the time statue's would play in my favor. Interesting note was that back in 2018 when 2017 was due TP did file extension. Would that then move the date away from May 17th?

I doubt, but I could file 2017 as MFS and that will give time for the other years.

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On 4/11/2021 at 12:34 PM, TAXMAN said:

Spouse needs to file a 2017 return. Sizable refund. Problem is Husband(83) went missing 2 weeks ago. His truck was found but he has not. How to file and how to sign? There is a carryover of payment from 2016 that I found.

I think your client has bigger problems than filing her return.  With that said, filing with some type of explanation may get the IRS to be sympathetic??  Can't hurt.  Explain the situation and ask for an extension of time.  

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The IRS cannot issue refunds beyond the three year window.  File 2017 somehow now and then wait for the other years. Don't feel bad since they had a few years when the husband was NOT missing to file and they didn't do so.

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I think the way to do this is to file the return with a copy of the police report ( a report was filed, I hope)along with form 56 appointing client as fiduciary.  Check line 1 g  (Other) and refer to the missing person police report.  She can then sign a MFJ report as the fiduciary.

It would be better if she could petition the court to appoint her, but sometimes that can take a long time.  In small towns and rural areas you might be able to get it done in a short time.

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  • 3 weeks later...

TP needs to file a return. Spouse went missing and a missing report was filed. Some 45 days later unable to find missing spouse.(80 years old). TP holds a GENERAL POA that does have the wording to sign "any deed, contract, court order, pleading, tax return, disability, or retirement election, or any other paper". Has a sizeable refund in it due to a carry over credit of estimated tax paid from a joint return. Would TP be better off to file a MFS return and ask for the refund? The tax year in question is a 2017 return about to die. Any ideas as time is very short.

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2017 unclaimed refunds – deadline extended to May 17

For tax year 2017 Federal income tax returns, the normal April 15 deadline to claim a refund has also been extended to May 17, 2021. The law provides a three-year window of opportunity to claim a refund. If taxpayers do not file a return within three years, the money becomes property of the U.S. Treasury. The law requires taxpayers to properly address, mail and ensure the tax return is postmarked by the May 17, 2021, date.

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On 5/5/2021 at 11:11 AM, TAXMAN said:

TP needs to file a return. Spouse went missing and a missing report was filed. Some 45 days later unable to find missing spouse.(80 years old). TP holds a GENERAL POA that does have the wording to sign "any deed, contract, court order, pleading, tax return, disability, or retirement election, or any other paper". Has a sizeable refund in it due to a carry over credit of estimated tax paid from a joint return. Would TP be better off to file a MFS return and ask for the refund? The tax year in question is a 2017 return about to die. Any ideas as time is very short.

I would be extremely wary of any general POA's, especially if it is purchased online, or from a stationery shop.   The IRS looks for certain wording and if that is not present, they will reject the return.   If it is drawn up by an attorney, it might have a better chance.   The POA has to be sent in with the tax return.

Filing MFS is a safe bet.  There is not enough time to refile if it gets rejected filing MFJ.  If hers is also filed MFS, and the IRS accepts the return, it can be amended later to MFJ, if necessary.

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Max this POA that I have a copy of was written up by an attorney and notarized in his office. It was also recorded in the local circuit court. My main concern is if I file her as MFS with the service refund the carry over from a previous joint return.

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34 minutes ago, TAXMAN said:

Max this POA that I have a copy of was written up by an attorney and notarized in his office. It was also recorded in the local circuit court. My main concern is if I file her as MFS with the service refund the carry over from a previous joint return.

You might want to read this older article in its entirety about filing MFS: http://archives.cpajournal.com/1996/1096/features/Married.htm

For those that don't like links, I'll include the entire last section here:

Quote

Estimated Tax Payments

Separate estimated tax payments may only be claimed by the spouse that made them. Where joint payments were made, the spouses may agree to share the payments in any amounts they want. One spouse may even claim credit for all the payments, while the other spouse claims none. In the absence of an agreement, the spouses must share the estimated tax payments in proportion to each one's individual tax as shown on the separate returns.

The IRS has issued a revenue ruling (80-7, 1980-1 C.B. 296) that contains a formula to be used in determining the allocated share of each spouse's portion of an overpayment that was credited on the prior year's joint income tax return. Basically, the formula allocates the credit by applying the ratio of a spouse's separate tax liability for the prior year to the total of both spouses separate liability for that year, to the amount of the total payments shown on the joint return. Once this separate contribution amount is determined, the amount of the overpayment credited to each spouse is simply the difference between each spouse's separate contribution and his or her liability for taxes computed using the same ratio applied against the actual joint liability. *

 

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The short answer you are looking for is this:  if MFS and BOTH PARTIES AGREE, then the overpayment carryforward may be split in any manner they choose, and the IRS will accept that allocation. This is done by each filing a return claiming their agreed-upon share of the carryover. Absent both filing or If they can't agree, then the IRS will allocate based on a formula that divides based on each person's proportional share.  Cite is reg sec 1.6015(b)-1(b)

Also, the IRS may still question and reject that POA even though it includes "tax returns" because IRS wants its POAs to include the very specific language found in the code. 

Sorry if that isn't much more help on how to file. At the risk of being rejected, I think I'd try to file it as MFJ rather than as separate returns because at least the attention won't be drawn to the splitting of the carryover right from the beginning. 

The only other thing I can think of is on a MFS return is questioning whose funds mostly created the overpayment to begin with? If it came from a separate account in husband's name, or if it was all from withholding from husband's retirement distributions or social security, I think the wife would have a harder time claiming the overpayment if the IRS questioned the MFS return claiming the carryover if a return for the husband is rejected or never filed.

 

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My last thought, maybe-because my head isn't working well at the moment, is if an MFJ return is filed and signed by wife on behalf of husband using her authority of the POA, I wouldn't attach any further statement about the husband being missing.  In other words, don't give the IRS any more of a reason or anything else to question. Give them nothing more than the required information.  If IRS will accept that POA, then no further explanation should be needed.

Sorry if I'm rambling.

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With only 10 days left to file the return, MFJ is a huge risk.  Everything could be lost of the IRS rejects the POA. MFS salvages something and it could be amended to MFJ if circumstances change.

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Max W makes a good point. 

Taxman, whatever filing is done, I hope you will give us a followup post of how this plays out with the returns and if the husband is ever found. 

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If this is helpful, here are the rules that govern non-IRS POAs and what IRS requires in order for them to be acceptable, and how to perfect a non-IRS POA. It comes from Pub 947 but has the code sec cite of when the person with authority may sign a return and those requirements:

Quote

What Is a Power of Attorney?

A power of attorney is your written authorization for an individual to receive your confidential tax information from the IRS and to perform certain actions on your behalf. If the authorization is not limited, the individual generally can perform all acts that you can perform, except negotiating or endorsing a check. The authority granted to enrolled retirement plan agents, enrolled actuaries and unenrolled return preparers holding records of completion is limited. For information on the limits regarding annual filing season program record of completion holders, see Revenue Procedure 2014-42 and IRS.gov/Tax-Professionals/Return-Preparer-Office-RPO-At-a-Glance.

 

Acts performed.

Attorneys, certified public accountants, and enrolled agents may perform the following acts:

  • Represent you before any office or employee 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)), and
  • 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 Instructions for Form 2848.

 

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 5a 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 5a "Other acts authorized" 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 receive your confidential tax information and 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 an IRS inquiry.

 

Form Required

Use IRS Form 2848 to appoint a recognized representative to act on your behalf before the IRS. Individuals recognized to represent you 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 document other than Form 2848 to authorize the representation, it must contain the following information.

  • Your name and mailing address.
  • Your social security number (or your individual taxpayer identification number (ITIN)) 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 subject to regulations contained in Circular 230 (31 C.F.R., Subtitle A, Part 10) as amended, governing practice before the Internal Revenue Service,

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

I am a (naming the capacity in which representation is undertaken, as set forth in the list of eligible representatives at Part II of Form 2848.)

 

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.

Quote

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).

 

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13 hours ago, joanmcq said:

That seems to be more tailored towards non-spouse POAs though. 

No, the IRS won't see any difference in the POA.  At this point and without a valid perfected POA that IRS will accept, the only return the wife could file is her own as MFS.  If the wife wants to file either return (MFJ or MFS for husband, she MUST "perfect" that general POA because the general POA isn't specific enough with its wording of only "tax return".  

To summarize...again:

Spouse can only sign joint return on behalf of if -

  • INJURY OR DISEASE PREVENTS SIGNING If one cannot sign because of disease or injury and tells his or her spouse to sign, then spouse can sign on behalf of the other followed by the words, “By (your name), Husband (or Wife)”. Attached a dated statement signed by you which includes the form number of the return you are filing, the tax year, the reason your spouse cannot sign, and that spouse has agreed to your signing for him or her. (Don’t forget to also sign in the space provided for your signature.)
  • SPOUSE DIED BEFORE SIGNING If your spouse died before signing the return, the executor or administrator must sign the return for your spouse. If neither you nor anyone else has yet been appointed as executor or administrator, you can sign the return for your spouse and enter “Filing as surviving spouse” in the area where you sign the return.
  • SPOUSE IN COMBAT ZONE – NO POWER OF ATTORNEY You are permitted to sign for your spouse serving in a combat zone, or performing qualifying service outside of a combat zone, or in missing status in a combat zone. Attach a signed statement to your return that explains the situation qualifying you to sign.
  • SIGNING AS GUARDIAN OF YOUR SPOUSE If you are the guardian of your spouse who is mentally incompetent, you can sign the return for your spouse as guardian. Sign your spouse’s name, followed by the words, “By (your signature), guardian.”
  •  SPOUSE AWAY FROM HOME If your spouse is continuously absent from the United States for at least 60 days prior to the due date for filing the return, you may be able to sign the tax return with a properly executed power of attorney. Otherwise, you should sign the return and send it to your spouse to sign so that it can be filed on time.
  • DIVORCED TAXPAYER If you are divorced under a final decree by the last day of the year, you are considered unmarried for the whole year, and cannot choose married filing jointly as your filing status. If the divorce became final after the end of the tax year, you may file a joint return. However, you generally can sign on behalf of your ex-spouse only if you are given a “valid power of attorney” that is enforceable after the divorce. (See “SIGNING WITH A POWER OF ATTORNEY” below.)
  • OTHER REASONS SPOUSE CANNOT SIGN If your spouse cannot sign the joint return for any other reason, you can sign for your spouse only if you are given a valid power of attorney”. (See “SIGNING WITH A POWER OF ATTORNEY” below.)

 

Again, because Taxman's client doesn't fit into any of the above reasons except the last one of "other", if she wants to file a joint return or file a MFS on behalf of the missing husband, she needs a valid POA.  Right now, that general POA doesn't contain all of the language to meet the IRS requirement but may be perfected as described below.

 

SIGNING WITH A POWER OF ATTORNEY (POA)

Regulations §1.6012-1(a)(5) permits you to rely on a POA as authorization to sign a return for another person only if that person is unable to sign due to disease or injury, continuous absence from the United States for at least 60 days prior to the due date for filing, or if specific permission has been granted by the IRS. The POA must specifically state that you are given the authority to sign, and give the specific reason why as listed above. You may be authorized to sign either as the taxpayer’s representative or agent. Generally, a representative must be an individual eligible to practice before the IRS, such as an enrolled agent, attorney, or CPA; a family member (limited to spouse, parent, child, brother, or sister) may also act as your representative. There are no restrictions on who can be appointed as an agent for the specific purpose of signing a specific tax return. The tax return (or electronic filing authorization) should be signed in the following manner: “(Taxpayer name), by (attorney-in-fact name) under authority of the attached power of attorney.”

The POA must be attached to the return. If the return is filed electronically, the power of attorney must be attached to Form 8453 and mailed to the appropriate service center once the electronic return is accepted for processing.

A non-IRS POA may be used, but it MUST contain:

  • the taxpayer’s name and mailing address,
  • social security number,
  • the name and address of the agent or representative,
  • the type of tax involved (“income tax”),
  • the federal tax form number (1040, 1040A, etc.),
  • the specific year(s) involved,
  • a clear expression of the authority granted,
  • and the taxpayer’s dated signature.

To be authorized as the taxpayer’s representative (as opposed to agent), the non-IRS POA must also contain or have attached to it a signed and dated statement made by the representative referred to as the Declaration of Representative (which can be found in Part II of Form 2848).

If the non-IRS power of attorney does not contain all the information listed, the IRS will not accept it. Non-IRS POAs typically do NOT contain all the information required, simply because they often don’t specify tax form numbers and years, and don’t specifically authorize the signing of the tax return.

A non-IRS POA may be “perfected” as follows:

  • by signing a Form 2848 on behalf of the taxpayer, as long as the original non-IRS POA grants authority to handle federal tax matters (for example, general authority to perform any acts), and
  • a statement signed under penalty of perjury is attached to the Form 2848 stating that the original non-IRS POA is valid under the laws of the governing jurisdiction.
  • Sign Form 2848 in the following manner: “(Taxpayer name), by (attorney-in-fact name) under authority of the attached power of attorney.” The individual named as representative on Form 2848, often the attorney-in-fact, must also sign and date Part II of the form.
  • The specific authority listed must include the authority to sign the tax return
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