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Hi and welcome to Just Answer!Your mother had rights to appoint POA. Any person may appoint another by signing a form POA.Specifically for tax issues - following form should be used - www.irs.gov/pub/irs-pdf/f2848.pdfThe POA is required to act in the best interest of the person who appointed her - in your case in teh best interest of your mother.Based on your information - your sister simply stole the money - and if that is correct - you need to file a report to the local police. The investigator will be assigned - and if she committed a crime - the case will go to the court. If the court confirms the crime - the information will be sent to the IRS - and she will be required to include into her income the stolen amount - and will owe additional taxes on that income.