The New York Power of Attorney gives broad authority to the Agent with respect to managing the financial affairs of the Principal. But, will those agencies honor the Power of Attorney? Maybe yes, maybe no. That the New York State legislature enacted the Power of Attorney statues does not necessarily bind government agencies. Especially federal government agencies, like the Internal Revenue Service and the Social Security Administration. To some extent, whether or not the New York Power of Attorney will be accepted by a government agency depends on the reason the Agent needs to act on behalf of the Principal.
For example, IRS Publication 17 allows an Agent to sign a Principal’s tax return if IRS Form 8453 is sent to the IRS along with the Power of Attorney. (Page 8 of Publication 17 for 2019). The IRS may or may not reject a tax return signed by an Agent for the Principal.
The Internal Revenue Service also provides Form 2868, which permits another person to “represent you before the IRS” on federal tax matters. The words ‘represent you before the IRS’ are put in quotations, because those words refer to acts or communications with IRS having to do with issues beyond the administrative act of signing an individual tax return, such as dealing with an audit.
The New York State Department of Taxation will accept the statutory Power of Attorney (Title 20, Chapter IX, Part 2390.1 of the Codes, Rules and Regulations of the State of New York). That’s assuming the Power of Attorney includes the information needed by the Department of Taxation and Finance, which includes, among other things, the Principal’s Social Security Number. The New York Power of Attorney does not include a place to put a Social Security Number. And, the language on the New York Power of Attorney which allows the Agent to act on behalf of the Principal “in all tax matters,” (5-1502M), may not meet the requirements of the New York State Department of Taxation and Finance. The rules of the NYS Dept. of Taxation and Finance indicate the NY statutory Power of Attorney to be more specific with respect to the type of tax and period for which it applies. 20 CRR-NY 2390.1(d)(1)(i) – (v); 20 CRR-NY 2390.1(d)(2). If it doesn’t the rules say the NY Power of Attorney “. . . the power of attorney may be accepted as including representation for all taxes and all periods.” So “may be accepted” obvious means also, ‘or it may not be accepted’.
The Social Security Administration and the fact that SSA will not accept the NY Power of Attorney has been a lot of trouble for people. The Social Security Administration has two categories of “Agents” who can represent a Principal. These categories or titles are “representative payee” and “representative,” which are not the same.
A representative payee is a person or an organization. We appoint a payee to receive the Social Security or SSI benefits for anyone who can’t manage or direct the management of his or her benefits. . A payee’s main duties are to use the benefits to pay for the current and future needs of the beneficiary, and properly save any benefits not needed to meet current needs. A payee must also keep records of expenses. When we request a report, a payee must provide an accounting to us of how he or she used or saved the benefits.
Being an authorized representative, having power of attorney, or a joint bank account with the beneficiary is not the same as being a payee. These arrangements do not give legal authority to negotiate and manage a beneficiary’s Social Security and/or SSI benefits. In order to be a payee, you must apply for and be appointed by Social Security.https://www.ssa.gov/payee/index.htm
So as you can see there are several important exceptions to the general understanding of what a New York Power of Attorney can, or cannot, do for you.