Mailing and Issuance of a Tax Refund to a Party Other Than the Taxpayer
PURPOSE: The purpose of this Policy Statement is to explain the Department's new policy on the mailing of a taxpayer's refund to a party other than the taxpayer.
BACKGROUND: Bankruptcy trustees, executors of trusts and estates, the Attorney General's office, out-of-business sole proprietorships and tax advisory businesses that specialize in obtaining tax refunds for their clients occasionally request that the Department either mail or issue a taxpayer's refund to a person other than the taxpayer.
Connecticut's power of attorney statutes, Conn. Gen. Stat. §§1-3-56, authorize "broad and sweeping" powers to a person who is assigned the power of attorney (the "agent"). Included among the "broad and sweeping" powers given to an agent under Conn. Gen. Stat. §§1-43-56 are the powers to make, sign or deliver checks, to pay, compromise or contest taxes, to prepare, execute and file all tax returns and the ability to pay, compromise, contest or apply for refunds.
STATUTORY AUTHORITY: Conn. Gen. Stat. §§1-43 through 56, inclusive.
EFFECTIVE DATE: Effective upon issuance.
MAILING A TAX REFUND CHECK TO A PERSON OTHER THAN THE TAXPAYER: Form LGL-001, Power of Attorney (Rev. 12/98), provides that:
The attorney(s)-in-fact (or any of them) are authorized, subject to revocation, to receive confidential information and to perform any and all acts that the taxpayer can perform with respect to the above-specified tax matters (excluding the power to receive refund checks). [Emphasis supplied.]
Although there is nothing invalid about the terms of the March 1993 revision of Form LGL-001, the Department has determined that it is not legally precluded from allowing a taxpayer's refund check to be mailed to a person to whom the taxpayer has given power of attorney.
Therefore, the Department now will permit a taxpayer's refund check, which is made payable to the taxpayer, to be sent directly to the taxpayer in care of an agent where the taxpayer has filed a power of attorney specifically authorizing the agent to receive refund checks. Consequently, Form LGL-001 has been revised to reflect the Department's new policy.
FORM LGL-001 REVISED: Form LGL-001 has been revised to implement the Department's new policy of permitting a taxpayer's refund check, which is made payable to the taxpayer, to be mailed to a party other than the taxpayer. The language that prohibited an agent from receiving refund checks has been eliminated. A section containing a list of powers that a principal may assign to an agent has been inserted. In order for a principal to assign those powers to an agent, the principal must check off the power or powers that the principal wishes to grant to the agent and sign his or her name to authorize each grant. These requirements are in addition to the notarization requirement of Form LGL-001.
ISSUANCE OF A TAX REFUND CHECK TO A PERSON OTHER THAN THE TAXPAYER: The Department has determined that specific statutory authority is required to issue (i.e., make payable) a tax refund to a person other than the taxpayer. Therefore, the Department will continue to issue checks in payment of refund claims only to the person entitled to the money under Title 12 of the Connecticut General Statutes.
EFFECT ON OTHER DOCUMENTS: None.
EFFECT OF THIS DOCUMENT: A Policy Statement is a document that explains in depth a current Department policy or practice affecting the liability of taxpayers. Unlike a Ruling, a Policy Statement does not apply a policy or practice to a specific set of facts but it may be referred to for general guidance by taxpayers.