Our condolences for your loss.
1. You are getting the message because the IRS will not issue a refund to the deceased and a different form, Form 1310, would be needed to establish you as the authorized representative.
2. You are correct, submitting a new Form 1040 without amending would complicate the situation. Also, the e-filing would be rejected. The e-file only allows for the social security number to be submitted once. Here are options for what can be done:
- Reach out to the IRS
- Contact an IRS taxpayer advocate for help resolving the matter
- Wait for the Notice to be mailed and reach out to the IRS according to the instructions on the Notice.
Form 1310 can used to claim the refund and establishes the authorized representative to receive the refund. Any refund would then be issued in that representative's name. This form can be mailed in by itself. TurboTax can help you prepare the form.
- However, if you were appointed personal representative by the court, then do not use this form. The IRS needed a copy of the court certificate showing your appointment attached to Form 1040, instead.
- Form 56 is for establishing a fiduciary relationship. It should not be used to establish yourself as an authorized representative. The IRS would want Form 4868, Power of Attorney and Declaration of Representative, instead, but that form requires two signatures.
- If you do not have Power of Attorney and are not the executor or administrator of the decedent's estate, then Form 1310 will be needed, which would only require your signature.
Since your mother-in-law passed away in 2021, she may be eligible for stimulus payments. If she had not received eligible stimulus payments before passing, then it should have been claimed as a Recovery Rebate Credit. If it was not, then you could file an amended return and add Form 1310 at the same time.
Her final return would be filed for 2021 in the spring of 2022.
You may wish to review this resource for more tax guidance about your situation: Death in the Family.
For full details, see IRS Resource: 2020 Publication 559: Survivors, Executors, and Administrators.
