QUESTION: Thank you for your great columns about the need for durable powers of attorney; however, you left out something very important: The Federal government refuses to recognize powers of attorney.
Case in point: In 1993 my mother died after suffering from Alzheimers Disease. A month after her death, my father suffered a massive stroke as a result of which he is paralyzed on his right side, cannot speak or write, and is bedridden in a nursing home. Although he is an 80-year-old retired Air Force Colonel who fought for his country in both World War II and the Korean Conflict, the IRS and Department of Defense are harassing my father and me in a situation to which neither he nor I can respond.
As his only child and living relative, I hold my father’s durable power of attorney which is recorded in the county where we live. Since 1993, I have used the power of attorney to handle his banking and even to sign his tax returns as his power of attorney. Then I found out that the federal government and the Internal Revenue Service RS do not honor a durable Power of Attorney. In fact, I couldn't even get my dad's 1099 statement from the Department of Defense using his power of attorney – or even change his address when I moved.
The Department of Defense insisted that my father’s doctor and lawyer either (1) apply for a probate court conservertorship – which is precisely the expense Dad wanted to avoid when he signed the power of attorney – or (2) have my Dad sign a document stating he is mentally incompetent.
At the same time, the IRS has refused to listen to reason. It took me from April until October to straighten it out at a cost to my father of more than $300 in late payments. Even with a letter from my father’s attorney, the IRS will not honor a recorded power of attorney. In fact, while the IRS representatives tell me that they understand his condition, they tell me it is IRS policy that my dad sign a 2848 IRS form – even though he can’t.
Why is it that
ANSWER: A durable power of attorney - which allows the designated person to sign checks and most legal documents for another - is an extremely important tool to for estate planning and other purposes. Husbands should have POAs for their wives, and vice-versa. Middle-aged children should have them for aging parents. The fact is, however, as you have learned, federal government agencies (including the IRS and Social Security) will not accept a POA. A durable power of attorney is perfectly acceptable on the state level, but not the federal. To us, this makes no sense whatever. If state courts and state agencies find POAs acceptable and legal, why not Uncle Sam? But Uncle Sam doesn't explain why; it's just "our policy." The best advice we can give you (and our other readers) is to contact your representative and senator in Washington and demand that this ridiculous policy be changed. Your war hero father - and countless others - should not have to go through additional rigmarole when you have already taken the time and effort to procure a POA.