OBTAINING AND
USING IRS TRANSCRIPTS
In
our office, we order an IRS transcript for any client about
to file Bankruptcy who has taxes owing. We also order
them for every client we represent in our Tax Problem
Resolution practice.
1. There are 3 basic types of IRS Transcripts that we order
on a regular basis, although in most cases the MFTRA-X will
suffice.
a. MFTRA-X Transcript:
This is a basic easy to read transcript which gives a
complete history of all activity on a Taxpayers account for
a particular period. These transcripts are a great place to
start and to determine how much the IRS claims is owed, how
much interest and how much penalties have accrued. They will
tell you the dates returns were filed, the dates that
assessments were made, whether there were tolling periods, etc.We obtain and use them in almost every case. Be aware,
that in some cases they may not tell the whole story,
though. Particularly in Bankruptcy Discharge cases, they
might not contain sufficient information to determine
whether particular taxes are subject to discharge.
b. Master File Transcript:
This is a detailed and complex transcript. It is set
up year by year. There are codes for every entry and a
translation sheet is needed to decipher the codes. This
transcript can tell you for example, whether a particular
return was filed by the Taxpayer or the Internal Revenue
Service, it can tell you whether there was a fraud
investigation and many other things.
c.
W2/1099 Transcript: This transcript will tell you what
was reported as being paid to the taxpayer period by period.
This is very useful if your client does not have these
records and needs to file tax returns.
2. We request transcripts using Practitioner Priority
Service, telephone number (866) 860-4259. We have found in
the last year that PPS is getting more particular about how
we go about making those requests.
You may also use the Disclosure Office. If the case is
in the hands of a Revenue Officer, they can also obtain
transcripts for you (and usually much more quickly).
The procedure
for requesting transcript information is as follows:
3. In order to have a legal assistant request the
transcripts we use Form 8821, which is an authorization to
release information when making the request.
4. Once the form is filled out, you are ready to call
PPS. Dial (866) 860-4259. You will be asked if this is a
request for an individual or a business. Push 1 for an
individual and 2 for a business.
5. You will be put on hold at this point until a
PPS agent becomes available. This agent can be located at
any of the service offices nationwide–you will never know
where you will end up.
6. At this point you will need to answer the questions
the agent asks–each one has a different order or system and
definitely some are easier to work with than others. We
always inform the agent that we have a signed Form 8821 in
our possession and ask if they would like us to fax it to
them. They always do. They will need to give you the
appropriate fax number for their office.
7. They will take the information and order the
transcript information you are requesting client by client
so be prepared for this to take a little time. Sometimes we
get an agent who works quickly, other times it takes a long
time. It is best to be cooperative and pleasant but also
familiar with what you are requesting. Sometimes the agent
you are working with will give you incorrect information or
is being difficult–we will often hang up and try again in
hopes of getting an agent we can better work with.
8. Now you have made your request this is what you can
expect:
a. W-2/1099 information
can and is often faxed to us while we are on the phone with
the agent. Request it if they do not offer. Depending on the
number of pages involved they usually will agree to fax them
to you on the spot.
b. 1040 or 940/941
information can and will take usually 2 weeks to receive by
mail. If the agent is on top of things they will receive the
requested information on their desk in 2-3 days and then
mail it on to you.
Sometimes we have waited for a month and have not
received the information we requested. We call PPS back,
explain what the history of the request is and ask that it
be reordered and sent to us expeditiously. (We keep really
good records regarding our requests such as date ordered,
agent identification number, fax number used and exactly
what we requested and what the agent told us regarding the
account.) There have been occasions when we have had to
request the transcripts several times. Create a good
tracking system just for this purpose.
Once we have received our client’s transcripts we
notify our client and set up an appointment to review them
and make plans for the next step.
Reviewing
and using the Transcripts
The MFTRA-X transcript is readily understandable.
They are broken down year by year. They contain
information about whether the taxpayer or the IRS filed a
return. They show the amount of tax, interest and
penalties. They show prior bankruptcies, Offers in
Compromise and other tolling factors. They will show
whether a lien has been filed and if so, when it was filed.
They are a wealth of information, both for Tax Problem
Resolution and for Bankruptcy analysis.
