GENERAL NOTES OF INTEREST TO OUR VISITORS

◙  CONSUMER PROTECTION LAWS

◙  HOW TO GET INFORMATION FROM THE IRS:

IRS HOTLINE (866) 860-4259  This IRS number will provide the MFTRA-X transcripts and can answer questions about the taxpayer's tax history over the phone (with your faxed power of attorney).

RECOMMENDED IRS TRANSCRIPTS:  As a matter of routine we recommend that you obtain at least two kinds of transcripts for each tax year. These are the MFTRA-X (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 MFTRA-X 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 MFTRA-X 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-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.

HOW TO GET THEM: The IRS MFTRA-X transcript can usually be obtained quicker than other kinds of transcripts. They may be requested by phone.

Step 1. You should first fax your power-of-attorney, signed and dated by your client and by yourself, to the national IRS fax line for powers-of-attorney. This is (fax no.) (801) 620-4249.

Step 2. Wait a day or two, then call the national IRS priority hotline phone number: (866) 860-4259.

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 3. 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 4. 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 MFTRA-X as the “record of account.” Tell them you need the record 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 POA 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.

The IRS person will order the transcripts pulled and probably fax them to you within a few hours. Hard copies will be mailed in a couple of days.

WHAT TO LOOK FOR: USING THE MFTRA-X or "Literal" transcript

For graphic of what a MFTRA-X looks like click here.

The MFTRA-X 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 MFTRA-X transcript for each tax year that you have requested. Note that the transcript does not have the letters MFTRA-X appearing anywhere on it. This is because the letters are simply the computer code entered by the IRS to bring up this particular transcript.

All MFTRA-X transcripts have the same basic look or format. The most obvious feature is that on each transcript having any kind of history on it, about one-third of the page from the bottom, 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 your ASSESSMENT DATE.

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 than 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. 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 was filed, instead.

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.

In about half 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 half 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.

Also, any of the following codes may indicate problems that may bear on the discharge analysis.

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