Do you know what the IRS has on file for you? If you have filed taxes or worked for an employer then your information is in the IRS database.
Any employer who pays someone and issues a 1099 or W2 would need to send a copy of that form to the IRS. This means that even if you forgot about a payment made to you by that individual or company the IRS will not forget that income. Even if you didn’t receive the 1099 form at tax time and/or did not claim that income on your taxes the IRS will still be able to see the discrepancy in your file.
Even if the IRS does not have the above methods to determine your taxable income they can conduct what is called an indirect audit. To do so they will determine how much it costs you to live in a year. By looking at your expenses they can determine what you must have as an income to meet those expenses.
Along with tax return transcripts and a tax account transcript, the IRS may have other documents that can reveal to you what information they have collected. If you are being audited the IRS is required to create an audit report. Any assertions they have against you will need to be documented in that report along with the reasons behind the assertions.
Taxpayers have a right to look at what the IRS has in their file. Even if you are not being audited it may be a good idea to see what information has been collected about you. IIf you decide to request your tax file to review it is best to have an Atlant tax attorney who understands how the IRS works to assist you.
