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IRS HOTLINE (866) 860-4259 - This IRS number will provide the account transcripts and can answer questions about the taxpayer's tax history over the phone (with your faxed power of attorney or IRS Form 8821 (see the "FORMS" button above).Link to IRS discussion of transcripts
Link to Morgan King's book, Discharging Taxes Under The Bankruptcy Reform Act of 2005OBTAINING TRANSCRIPTS
WHAT: Under BAPCPA, in every bankruptcy case
a copy of the debtor's tax return, or a Transcript of
Return is required to be lodged with the bankruptcy
trustee no later than 7 days before the meeting of creditors
pursuant to 11 U.S.C. § 521(e)(2)(A), for the most
recent federal tax period for which the taxpayer filed a
return (do not confuse a Transcript of Return with an
Account Transcript - see next column over). There is one "transcript of return"
for any given tax year. The "transcript of return, " or
“return transcript,” is not the same thing as an
"account transcript" (see boxes to the right). This
"transcript" provides only the financial information found
on the taxpayer's filed tax return. PURPOSE: The purpose of providing a transcript
of return (or copy of the actual return) to the trustee, as
prescribed by BAPCPA, is to allow the trustee to verify
income and expenses. HOW TO OBTAIN:
There are two ways to obtain the
"transcript of return." You can get it directly from the
IRS, or go through a private provider. DIRECTLY FROM THE
IRS: You can obtain a transcript of return
by completing and mailing or faxing IRS Form
4506-T
(PDF), Request for Transcript of Tax
Return, to the address or fax number listed in the
instructions. The 4506-T should be signed by your client and
your name and address entered in box # 5 on the
form. Transcripts will be mailed or faxed
directly to you, and should be received within two weeks
after the IRS gets your request. Transcripts can be mailed
to a third party if you specify this on Form 4506&endash;T.
However, you must sign and date the form giving your consent
for the disclosure. FROM A PRIVATE
PROVIDER There are a number of private entities
that can obtain transcripts of returns, typically within 24
to 48 hours. These entities charge for the
service. For a list of such providers visit the
home page for BankruptcyMedia.com and in "Best Bankruptcy
Web Sites" select "Transcripts of Return," or
click
here. WHAT: An account transcript
(formerly called the "MFTRA-X") is a history of the entire
tax account for a given tax period - for most situations the
calendar year for which the taxes are owed (do not confuse
with the "Tanscript of return" - see column at left). This
transcript is not the one you should be giving to the
trustee prior to the meeting of creditors. PURPOSE: The purpose for obtaining an account
transcript (also sometimes called the "literal transcript")
is to provide the debtor's attorney the information he/she
may need to determine if, or when, the debtor's tax
liabilities may be discharged in bankruptcy. In most cases
this can be determined with the account transcript. In some
cases more information may be needed to clarify anomalies or
omissions on the account transcript, in which case the
attorney may want to obtain the more advanced form of
account transcript, the IMF MCC Specific transcript (see
column to right). HOW TO
OBTAIN: The account transcript may be obtained
from the IRS Priority Hotline. The attorney first fills out
and has the client sign IRS form 8821
("Tax Information Authorization) or IRS form
2848
(Power of attorney). If
the form 2848 is used, the attorney must sign on the back at
the bottom. See the FORMS button at top. Second, attorney calls the Hotline at
(866) 860-4259 and explains that he/she is requesting
the account transcripts for the client. The IRS person will
request the attorney to fax a signed 8821 or 2848 (either
one usually works) with a cover sheet explaining which tax
years, and which kind of taxes, for which transcripts are
being requested, with the names, addresses and SSNs of the
clients. The IRS person will provide a fax number and then
remain on the line until the documents are
faxed. After the IRS person receives the
documents he/she will estimate how long it may take to
secure the transcripts. You may request that they fax them
to you, and they usually comply with that
request. When the attorney first calls the IRS
person may request the caller's “CAF” number. This
is an identification number you will receive which will be
good for all cases. If you don't have a CAF number the first
time you call, the Hotline person will probably provide you
with one or explain how to get it, but your not having it
should not be an impediment to obtaining the
transcripts. WHAT: If the account transcript (see column
at left) appears to contain contradictions, missing
information, or other anomalies, or fails to provide
information to your satisfaction, you may wish to obtain a
more complete type of transcript. The transcripts most often
requested by tax or bankruptcy professionals are the IMF MCC
Specific transcript (usually just called the "specific"
transcript) or the TXMOD (usually called the "tax mod")
transcript. PURPOSE: These transcripts contain a great deal
of additional information that the attorney may need in a
given case. For example, the simpler account transcript may
show a code 520 with a short explanation that it is
"Litigation or bankruptcy." However, it may not clarify
which it is, litigation, or bankruptcy, and this code is
also used to indicate a request for a due-process hearing,
which could impact the dischargeability of the tax.
The Specific and TXMOD transcripts can
provide that information. Also, it may not always be clear
from the account transcript whether the taxpayer filed the
return, or it was a substitute-for-return, which does not
count for purposes of determining dischargeability of the
tax. These transcripts will usually contain that
information. The downside to using these more
advanced transcripts is that they are entirely in code.
Unlike the account transcripts they contain no short English
explanations. Accordingly, one must become familiar with
what the codes mean. This is challenged many bankruptcy
attorneys would rather not take on. If you have questions because a
particular account transcript is not satisfying your needs,
you could pick up the phone and call the IRS Hotline. These
people are usually more than happy to examine your client's
transcripts with you on the line and provide answers to most
of your questions. An alternative is to obtain the
transcripts and then have a local enrolled agent translate
them for you. Enrolled agents are often ex-IRS employees who
are very familiar with tax transcripts and how to read
them. HOW TO OBTAIN: These more advanced transcripts are
obtained from the appropriate local IRS Disclosure office.
It may take up to 30 days to obtain these
transcripts. The attorney faxes the cover letter
letter explaining what is requested, with a signed 2848 or
8821. Be sure to include a return fax number and office
address. Click here for the IRS directory of
local disclosure offices -
As a matter of routine we recommend that you obtain at least two kinds of transcripts for each tax year. These are the Account Transcript (sometimes called the “literal” transcript, or “record of account); and the IMFOLI (individual master file online). These transcrips are about all the typical bankruptcy lawyer should attempt to utilize without seeking expert help.For most cases the Account Transcript will provide the critical dates (i.e., dates of assessment, date tax return was filed, date tax return was due, dates of prior bankruptcies, audits and offers-in-compromise). It will also indicate whether a lien has been filed and the filing date (it won't, however, show what county it was filed in).
The IMFOLI will indicate in most cases whether the tax return that was filed was a substitute for return (SFR or SUBST), or the taxpayers return (“POSTED”). The IMFOLI will also indicate if there were subsequent additional assessments after the return was filed.
If the Account Transcript does not provide all the information you need, or raises questions in your mind about certain dates or transactions, you should next obtain either the IMF MCC SPECIFIC transcript or the TXMOD. These contain much more information, but are written entirely in code. You will need to know something about what to look for on these transcripts. If you do not feel confident about using them, enlist the help of a lawyer or enrolled agent who knows how to read them. If you want to try your hand at using the Specific transcripts, you should pick up Morgan King's Discharging Taxes in Bankruptcy, that has a chapter on using transcripts. Or, you can have TaxJustice.com (e.g., Morgan King) do a transcript analysis; click on this button:
HOW TO GET THEMThe IRS account transcript can usually be obtained quicker than other kinds of transcripts. They may be requested by phone.
Step 1. Obtain your “CAF” number. The Centralized Authorization File (“CAF”) number is a number issued by IRS to each representative whose power of attorney, and each designee whose tax information authorization, has been recorded on the CAF system. To obtain a CAF number Fax a letter requesting a CAF number to one of the locations seen in Step 3, below. When you call the IRS priority hotline (see step 3) they will ask for your CAF number.
Step 2. You should next prepare your IRS Form 2848 power-of-attorney, or IRS Form 8821 tax information request, signed and dated by your client and by yourself.
Step 3. Call the IRS centralized “Priority Hotline” [(800) 860-4259]. They will ask you to fax your form 2848 or 8821; they will provide the fax number.. Once they have it, they will give you the transcript information (date of assessment, date the taxpayer filed his/her return, etc.), verbally on the phone, and they will provide hard-copy of the account transcript and IMFOLI transcripts, usually within a few days of request.
In the alternative, fax the form to the CAF unit indicated below (see addresses and fax numbers below). Wait a day or two, then call the IRS hotline number; the fax number is a central registry where any office of the IRS can verify that you have the form on file. Then call the hotline number to request the transcripts. There are three central fax numbers:
FAX YOU POWER OF ATTORNEY OR 8821 TO ONE OF THE FOLLOWING CENTRAL REGISTERS:
Ogden (OAMC)
Mail 1973 N. Rulon White Blvd.
M/S 6737, Ogden, UT 84404
Fax (801) 620-4249Memphis (MAMC)
Mail 5333 Getwell Road, Stop 8423
Memphis, TN 38118
Fax (901) 546-4115Philadelphia (PAMC)
Mail 11601 Roosevelt Blvd., DPSW312
Philadelphia, PA 19255 (international only)
Fax (215) 516-1017
States west of the Mississippi should submit authorizations to OAMC; states east of the Mississippi should submit authorizations to MAMC. The exceptions are: authorizations related to taxpayers residing abroad, which should be submitted to PAMC, and Arkansas and Louisiana submit authorizations to MAMC.Step 4. When you call the hotline number, you should be given the option to press “1” to select an individual's record of account, or press “2” for an individual's business account.
Step 5. In most cases you will press “1.”
At that point, you will be given the option of waiting on the line to speak with a real person.
Step 6. When the person comes on the line, explain who you are and what you need. Explain that you faxed your power-of-attorney to the national fax number. The staff of the priority hotline typically refer to the account transcript as the “record of account.” Tell them you need the account transcript or record of account for each tax year for which you believe your client owes.
You will be asked your client's social security number and name. You should have that at hand before you place the call. If you select option “2” for business records of account, you will be asked for the federal I.D. tax number for the business.
The IRS person will probably put you on hold to check whether your 2848 or 8821 has posted or not. If not, volunteer to fax it directly to the person to whom you are talking at his or her individual fax number. Tip: type your client's name and phone number in the upper right corner of each page, thus assuring the receiver will not lose track of whose documents your form relates to.
The IRS person will order the transcripts pulled and probably fax them to you within a few hours or a few days. Hard copies will be mailed in a couple of days.
WHAT TO LOOK FORUSING THE ACCOUNT TRANSCRIPT or "Literal" transcript:
For graphic of what an account transcript looks like CLICK HERE.
The account transcript is the simplest of the various tax transcripts. It is easiest to interpret, because there is a short English description next to most of the important code entries. Other transcripts are entirely in code and are more challenging to interpret.
There will be one account transcript for each tax year that you have requested.
All account transcripts have the same basic look or format. The most obvious feature is that on each transcript having any kind of history on it, near the bottom, or at the top of the next page, on the left side, will appear the number “150.” This is a transaction code number. Next to this number will be a short explanation. Usually, one of two messages will appear: it will either say Return Filed and Tax Assessed, or it will say Substitute For Return filed. To the right will be a date. In the far right column there may be a zero or a dollar amount
Immediately below the code 150 will appear additional codes, with their short explanations.
Here is a checklist to use to check each transcript.
1. Check the taxpayer's name and social security number; is this transcript for the right taxpayer?
2. Check the tax year (upper right corner). Is this the year you are interested in?
3. Check the amount owed, if any (about a third of the way down from the top, on the left; “Account balance - plus accruals.” If there is a zero, your client may have already paid off this account.
4. Find most recent date a tax was assessed. The codes 150, 290 and 300 are the assessment codes. Some entries using these codes may have zero posted instead of an amount, in the far right column. The one's with zero can be ignored. Go down the list looking for any 290 or 300 entries, and find the most recent assessment for which an actual dollar amount of tax was assessed. THIS IS THE ASSESSMENT DATE. The 240-day period starts with this date, for each assessment.
5. Determine when the taxpayer filed his tax return. About half-way down from the top, on the left, find the words “Tax per return.” To the right of those words should appear a dollar amount. If the number is zero, it means either that your client did not file a return, or he filed one showing no tax owed. If there is an $ amount showing other than zero, this means your client filed a tax return (because the figure found there is taken from a filed return). Now look down about five lines. You will find a line saying “Return due date or return received date.” THIS IS THE DATE THE TAX RETURN WAS FILED. The two-year period starts with this date.
Note, however: if there was no dollar amount appearing next to “Tax per return,” this date may not necessarily be the date your client filed a return; it may be the date a substitute for return (“SFR”) was filed, instead; typcally an SFR does not qualify as a return for purposes of discharge under th Bankruptcy Code.
6. Determine the most recent date a tax return was due. Normally, this date will be April 15 of the following year. So, if you are looking at the year 1995, for example, usually the due date will be April 15, 1996. But some taxpayers file extensions to file their returns. This pushes the due date back to either August 15, or October 15.
Examine all the codes under code 150. Look for the code 460. Each 460 represents an extension filed. If there are no code 460s on the transcript, no extension was filed, and the due date is April 15 of the following year. If there is one or more 460 entries, find the most recent one, and find the date the extension went to. THIS IS THE DUE DATE OF THE RETURN. This is the date the three-year period begins.
In about four-fifths of your cases, the three critical items (date of assessment, date return was filed, and due date) can be readily ascertained by looking at the MFTRA-X and looking for the items describe above.
However, in about 20% of the cases the information contains anomalies, or contains additional information that may complicate the tax discharge analysis. if you find any anomalies on the transcript (such as the codes or the information not being consistent with what I have described above) you are risking coming to the wrong conclusions about the dates. In that case, you are better off letting TaxJustice.com examine the transcripts for you.
If you have questions about what the MFTRA-X is telling you, a call to the IRS Priority Hotline (866-860-4259) may solve the puzzle; the IRS people at that number will review the transcript with you and explain most mysteries.Also, any of the following codes may indicate problems that may bear on the discharge analysis.
240 Penalty - may indicate fraud or tax evasion conduct. Used with “reference” numbers.
290 Additional tax assessed
300 Additional tax assessed
320 Fraud penalty
460 Extension to file return
420 Audit commenced
480 Offer-in-compromise submitted
520 Previous bankruptcy (or other tax litigation)
582 Tax lien filed
910, 914, 916, 918 Criminal investigation
595 Account referred to examination
NEED HELP READING THE TRANSCRIPTS?If you don't feel confident about reading transcripts, or you have come across a transcript containing anomalies or other difficulties, there are several sources you can turn to.
1. The first place to begin is the IRS Priority Hotline. (866) 860-4259 These people can pull up the transcript on their monitors, and see what you see. They are will informed and can almost always explain any puzzles in the transcript. They will ask you to fax a power-of-attorney signed by the taxpayer.
2. For a thorough discussion of tax transcripts and how to use them in analyzing dischargeability in bankruptcy, obtain King's Discharging Taxes in Bankruptcy.
3. Morgan King offers a consulting service for help in reading transcripts and tax discharge issues. Visit his web site TaxJustice.com or call 925-829-6363.
4. You could consult with an experienced enrolled agent in your vicinity. Enrolled agents are usually people who have retired from the IRS and typically are quite versed in the use of transcripts. You can find an enrolled agent at the web site for the National Association of Enrolled Agents.
ADP TRANSACTION CODES
& COLLECTION STATUS CODESACTION CODES
COLLECTION STATUS CODES
