Bank finance articles and tips

If you've ever wondered if there is a secret file stored away in a government building somewhere with all your personal information - you're right. Well, kind of. The IRS collects and maintains files on every taxpayer in America, and that includes you! For every tax year, they know how much you got paid, how much interest your bank paid you, how much you contributed to your retirement account, and myriads of other information about your wages and income.

The IRS knows what returns you've filed, what returns you haven't filed, what you owe, when your last audit was, and how it turned out. They even keep track of where you live now and where you lived in the past.

All that being said, there is still a great deal that the IRS doesn't know about you. One of the reasons taxpayers are so terrified of the IRS is that, there is a universal perception that the IRS has more information than they really do. Wouldn't you like to know what the IRS really does know about you?

You have two main tools available to you to obtain copies of IRS information; transcripts, and the Freedom of Information Act (FOIA).

Transcripts come in three types:

• Account transcripts
  
• Wage and income transcripts
  
• Return transcripts
  

All three types of transcripts can be ordered directly from the IRS by filling out a form 4506-T or through a tax professional. They can also be obtained by calling the IRS at 1-800-829-1040, but if you owe the IRS money and they get you on the phone, they will pump you for financial information before they hear your request.

An account transcript contains information about your accounts with IRS by tax year. It includes amounts you owe from tax returns or audits, additions such as penalties and interest, payments you have made, and your balance due.

A wage and Income transcript includes data the IRS has on your various sources of income such as wages, interest, stock sales, etc. It consists of your W-2s, 1099s, 1098s, and other forms filed with the IRS by third parties.

A return transcript is not a photocopy of your filed tax returns, but it does show the dollar amounts you reported line by line so you can figure out what your tax return looked like in case you have lost it.

The second tool; the Freedom of Information Act (FOIA) request entitles you the taxpayer to certain IRS documents such as legal files, auditor work papers, and other forms of information the IRS has on file. FOIA requests are not usually necessary, but if you are in hot water with the IRS, a FOIA request might get you information about how the IRS made their determinations. This can be vital in determining the best course of action and your defense strategy.

To learn more about successfully negotiating with the IRS, please read the upcoming five articles in this Ezine Article Set: How low can you go? Know your reasonable collection potential, Honey vs. Vinegar: Align your goals & Earn some leeway, When to call the IRS, When not to call the IRS, and You're in over your head; know when to bring in a tax pro.

Jay Mangrum is a Sr. Tax Advisor with Houston based Assurance Tax Advisors, a national tax resolution firm specializing in IRS audit representation and tax consulting. For more information on this and other tax topics, visit their website.

Visit our website at: http://www.assurancetaxadvisors.com/

Visit our blog at: http://assurancetaxadvisors.com/blog

By Jay P Mangrum
Article Source: http://EzineArticles.com/?expert=Jay_P_Mangrum