Form 56

[Peanut Butter Man]

Have an IRS auditor requiring Form 56 to be signed as part of an audit of a small husband and wife defined benefit plan. I've never had an IRS auditor require Form 56 to be signed before. Auditor is threatening that audit will be closed unagreed if plan sponsor does not sign Form 56. Is this normal?

[gc@chimentowebb.com]

[quote} Auditor is threatening that audit will be closed unagreed if plan sponsor does not sign Form 56. Is this normal?

They need to get Form 56 http://www.irs.gov/pub/irs-pdf/f56.pdf signed so that they can issue summons for information from third parties. Here's a key quote from the IRS Manual:

"With the enactment of RRA 98, the notice procedures now apply to almost all third-party summonses. Therefore, the Service must accurately distinguish third-party summonses from those served on a taxpayer. In most situations, this distinction is obvious. However, it is less obvious in at least two circumstances: those involving married couples who file joint returns and those involving employees or corporate officers who are summoned in that capacity."

http://www.irs.gov/irm/part25/ch05s06.html

It does sound like you have a real audit under your hands.

George