Does Requesting a Transcript of a Tax Return Flag an Audit?
Many folks prefer not to deal with the Internal Revenue Service and worry that any type of inquiry on their account may cause the IRS to take a second look at returns or transactions posted to their account. However, requesting a transcript of a tax return you filed is not an event that flags your account for audit. In fact, you are entitled to the information contained in any transcripts associated with your account and may request the information as often as you wish.
Tax Return Transcript
A tax return transcript is simply a line-by-line text detail of items reported on your original return. The transcript is not a physical copy of your return. However, the transcript does list all the same information reported on your return, including Social Security numbers of all filers and dependents claimed, gross income and any deductions or credits reported. Besides the layout differences between the tax return transcript and a tax return copy, requesting a transcript from the IRS is free, whereas the IRS charges a fee for physical copy requests.
Right to Have Tax Information
All taxpayers -- and spouses of jointly filed returns -- have a right to tax return information for personal record keeping. An individual might misplace or lose his original return, but this does not remove his right to have and keep records of his tax return information. For this reason, the IRS offers the tax return transcript service, and anyone can request a transcript of his return for free, as long as the request is for a tax period that is still available. In general, the IRS keeps records on file for the current and previous three tax years.
Third Party Authorizations
In addition to each individual’s right to have his own tax return information on record, other parties may request a tax return transcript on your behalf as part of a routine proceeding, but third parties may only make these requests if you have authorized them to receive the information. For example, it is normal for a mortgage company to request authorization to receive and inspect a copy of a tax return transcript to confirm that income information provided on a loan application is accurate.
Reasons for Audit
Requesting a transcript of a tax return does not trigger an audit. Some audits are random, but others are triggered by discrepancies between what you report and other information the IRS receives. The IRS uses computer and statistical screening methods to select returns for audit, and it may also examine returns that do not report all the income the IRS has on file for the taxpayer during the year. If your return is selected for audit, it will be for one of these reasons and not due to a request for a tax return transcript.
With a background in taxation and financial consulting, Alia Nikolakopulos has over a decade of experience resolving tax and finance issues. She is an IRS Enrolled Agent and has been a writer for these topics since 2010. Nikolakopulos is pursuing Bachelor of Science in accounting at the Metropolitan State University of Denver.