POA reporting is the formal accounting an agent under a power of attorney provides to show how they have handled the principal’s money and property. It covers every dollar received, every dollar spent, and every transaction made on the principal’s behalf during the reporting period. Under the Uniform Power of Attorney Act, which at least 31 states have adopted in some form, an agent must keep that record from the moment they accept the role and produce it when an authorized person or a court asks for it.
The Record-Keeping Duty Comes First
An agent under a power of attorney is a fiduciary. That means they owe a legal obligation to put the principal’s interests ahead of their own. Section 114 of the UPOAA requires the agent to act in good faith, stay within the authority the POA document grants, and act with the care a reasonable person would use in similar circumstances. The agent must also keep a record of every transaction, every payment received, and every dollar spent on the principal’s behalf.1Uniform Laws Commission. Uniform Power of Attorney Act – Section 114
The duty to disclose those records is a separate matter. It is triggered only when an authorized party asks or a court orders it. Agents who treat record-keeping as optional until someone complains have no defense when the demand finally arrives. The records should have existed all along.
Section 114 also requires the agent to preserve the principal’s estate plan to the extent the agent knows about it, cooperate with anyone who has authority to make healthcare decisions for the principal, and avoid conflicts of interest.1Uniform Laws Commission. Uniform Power of Attorney Act – Section 114
What Goes Into the Accounting
A proper accounting is more than a stack of bank statements. It is an organized record that lets a reviewer trace every dollar from start to finish over the reporting period. No single federal template exists, but the standard components are consistent across most jurisdictions.
Income and Assets
Start with an inventory of all assets at the beginning of the period and a list of every source of income received during it. That includes Social Security payments, pension distributions, investment dividends, rental income, and any proceeds from the sale of property. If property was sold, include the sale price, the closing disclosure, and where the proceeds went. The goal is a clear picture of the principal’s net worth at the start and end of the period, so any significant fluctuation is immediately visible.
Expenses and Disbursements
Every payment the agent makes from the principal’s funds needs a record showing the date, the payee, the amount, and the purpose. Supporting documents like receipts, invoices, and canceled checks back up each line item.2Internal Revenue Service. What Kind of Records Should I Keep Routine expenses like housing costs, utilities, and insurance premiums are expected. Unusual or large expenditures deserve a brief explanation of why the expense served the principal’s interest.
Investment Activity
If the agent manages a portfolio, the accounting should show every trade, purchase, or redemption during the period, along with the current valuation of all holdings at the end. Brokerage statements usually serve as adequate documentation.
Agent Compensation
Agents are generally entitled to reasonable compensation only if the POA document authorizes it. The accounting must document any compensation the agent took, including the rate, the hours worked or the basis for the fee, and the total amount withdrawn. If the POA document is silent on compensation, the agent should not be paying themselves without court approval. This is one of the first things a reviewing court or family member will scrutinize.
Tax Payments
The accounting should reflect any tax payments made on the principal’s behalf, including quarterly estimated taxes, annual income tax filings, and property tax assessments. Documentation of timely tax payments protects the principal from penalties, liens, and interest charges.
Who Can Request an Accounting
Under the UPOAA, an agent is not required to volunteer an accounting to anyone. The obligation to disclose kicks in when a request comes from an authorized party or a court orders it.3Justia Law. New Mexico Statutes Section 45-5B-114 – Agents Duties The people who can demand to see the books include:
- The principal, as long as they have capacity, with an unrestricted right to review how their money is being handled.
- A court-appointed guardian or conservator who steps into the principal’s shoes for review purposes.
- A co-agent or successor agent acting for the principal.
- Government agencies like Adult Protective Services during an investigation into potential financial exploitation.4Texas Department of Family and Protective Services. Adult Protective Services Handbook – 15000 Confidentiality and Integrity of Records
- The personal representative of the principal’s estate after the principal dies.
Section 116 of the UPOAA also lets a broader group petition a court to review the agent’s conduct, including the principal’s spouse, parents, descendants, presumptive heirs, named beneficiaries, healthcare decision-makers, caregivers, and anyone who demonstrates sufficient interest in the principal’s welfare.5Uniform Laws Commission. Uniform Power of Attorney Act – Section 116 If the principal still has capacity and objects to the petition, the court will generally dismiss it unless evidence shows the principal cannot actually revoke the agent’s authority.
When the Report Is Due
Response to a Formal Request
When an authorized party requests an accounting, the UPOAA gives the agent 30 days to comply. If the agent cannot meet that deadline, they must provide a written explanation of why more time is needed and then comply within an additional 30 days.3Justia Law. New Mexico Statutes Section 45-5B-114 – Agents Duties The outside limit is 60 days from the original request. If the agent still hasn’t produced the accounting after that, the requesting party can petition the court to compel disclosure.
Scheduled Reporting
Many POA documents build in a reporting schedule, commonly once every 12 months. The document itself governs those intervals, so read the POA carefully. Where the document is silent, the default under most state laws is that reporting happens only on request or by court order, not on an automatic schedule.
Final Accounting
A final report is required when the agent’s authority ends, whether because the principal dies, the principal revokes the POA, or a successor agent takes over. The closing accounting covers the gap between the last report and the moment the agent’s power ceased. It matters most when the principal has died, because heirs and the personal representative of the estate will use the final accounting to verify that the principal’s assets are intact before probate proceeds.
Consequences for Failing to Account
Agents who ignore accounting requests or produce incomplete records face real consequences. Under Section 117 of the UPOAA, an agent who violates the Act is liable to the principal or the principal’s successors for the resulting damages, plus reasonable attorney’s fees and costs paid from the principal’s estate to deal with the breach.6Uniform Laws Commission. Uniform Power of Attorney Act – Section 117 An agent found liable must restore the principal’s property to the value it would have had if the duty hadn’t been breached.7Alaska Legislature. Power of Attorney Abuse – What States Can Do About It
In practice, a court can order a surcharge, which forces the agent to repay the principal’s estate for any losses the agent caused or cannot explain. The agent who took sloppy notes or commingled the principal’s money with their own will have a very difficult time proving that missing funds were spent properly. Courts treat unexplained gaps in the record as evidence of mismanagement, not harmless oversights.
Beyond financial liability, a court reviewing the agent’s conduct under Section 116 has broad authority to grant “appropriate relief,” which can include revoking the agent’s authority entirely. The court can also award attorney’s fees to the party that brought the petition, so an agent who forces a family member to hire a lawyer just to get basic financial information may end up paying that family member’s legal bills.5Uniform Laws Commission. Uniform Power of Attorney Act – Section 116
Federal Tax Touchpoints Agents Miss
Managing someone else’s finances under a POA creates federal tax responsibilities that agents frequently overlook.
IRS Form 2848
To contact the IRS on the principal’s behalf, resolve tax issues, or access confidential tax information, the principal should file IRS Form 2848, Power of Attorney and Declaration of Representative. This form authorizes a specific individual to represent the taxpayer before the IRS and to receive and inspect tax records.8Internal Revenue Service. About Form 2848 – Power of Attorney and Declaration of Representative A general durable power of attorney may not be sufficient on its own for IRS purposes, so filing Form 2848 avoids delays if a tax problem arises.
Form 56
Form 56, Notice Concerning Fiduciary Relationship, serves a different purpose. An agent under a standard POA generally does not file Form 56. That form is designed for court-appointed fiduciaries like receivers, assignees, and trustees. The IRS instructions specifically state that Form 56 should not be used to notify the IRS that you are an authorized representative of the taxpayer; Form 2848 is the right form for that.9Internal Revenue Service. Instructions for Form 56 (Rev. December 2024)
Household Employer Taxes
Agents who hire caregivers, home health aides, or other household workers for the principal can trigger employer tax obligations. For 2026, if you pay a household employee $3,000 or more in cash wages during the year, Social Security and Medicare taxes apply. Federal unemployment tax kicks in if you pay household employees a combined total of $1,000 or more in any calendar quarter.10Internal Revenue Service. Publication 926 (2026) – Household Employers Tax Guide These obligations are reported on Schedule H, filed with the principal’s Form 1040. Paying caregivers in cash and skipping these filings exposes the principal to back taxes and penalties.
Delivering, Filing, and Keeping the Report
How the report gets delivered matters as much as what’s in it. The agent needs proof that the accounting was actually provided, because a dispute two years later will come down to documentation.
Certified mail with a return receipt is the most reliable method. The mailing receipt and the signed return card together prove the date and fact of delivery. Digital delivery works if the principal or the court has consented to electronic communication, but keep a record of the transmission and any read receipt. Regardless of how the report is sent, retain a complete copy of the accounting and all supporting documents.
If the POA is connected to an active probate or guardianship case, the accounting may need to be filed directly with the court clerk. Filing fees vary by jurisdiction. The clerk will stamp the filing as received and add it to the case file for judicial review.
Redacting Sensitive Information
Any filing made with a federal court that contains a Social Security number or financial account number must be redacted to show only the last four digits of each, under Federal Rule of Civil Procedure 5.2.11Justia Law. Rule 5.2 – Privacy Protection for Filings Made With the Court The responsibility to redact falls on the person making the filing, not the court clerk. Most state courts have adopted similar privacy rules. An agent who files unredacted bank statements has effectively published that information.
How Long to Keep the Records
The POA document may specify a retention period, but most do not. In the absence of specific instructions, keep all records at least as long as the applicable statute of limitations for breach of fiduciary duty, which varies by state but commonly runs three to six years. The IRS can audit returns going back at least three years and up to six in certain situations, so tax-related records should be retained at least that long.
The practical advice is to keep everything for at least seven years after the agent’s authority ends, and indefinitely if there is any hint of a dispute. After the principal dies, the personal representative of the estate has the right to request the agent’s records, and that request may come well after the funeral. An agent who shredded the files six months after the principal passed away will have a very uncomfortable conversation with the probate court.