Tax Help in Jefferson City and Central MO

Along with tax season comes the season of tax identity theft. Those who have become victims know how frustrating the experience can be.

The frustration

Until now, if you were a victim of tax identity theft, you would be unable to receive information from the IRS about the depth of the fraud. Many frustrated taxpayers have tried to get copies of the fraudulently filed tax returns. The IRS has repeatedly refused freedom of information requests to get these copies.

What’s new?

In a recent announcement, the IRS has changed course on requests to get copies of fraudulently filed tax returns. As long as you follow their instructions, you are now able to get copies of what thieves attempted to do with your tax information. But be forewarned. The IRS may black out information on the requested return that does not pertain to you. They will try to present you with enough of the falsely filed tax return to allow you to determine the depth of the data that has been stolen.

Why the theft information may be important

• You can see what personal information the thieves have. What has been compromised? Name, address, and Social Security Number? Do they have your dependent’s or spouse's information? Perhaps they also have your income and withholding data. Knowing this will help you plan the extent of data protection you will need.
• There may be clues as to where the identity theft occurred. Of the information stolen, who had access to it? Did the data breach of your identity happen through the IRS or somewhere else?
• There may be more tax years impacted than you thought. Request information from the year you first became aware of the identity theft at the IRS. But you may wish to request information in a prior year and in the year following the theft. The IRS has access to up to six years of tax returns. Try to determine whether the theft is ongoing is a one-time occurrence.

The request requires specific information. Here is a link to the IRS announcement: Instructions for Requesting Copy of Fraudulent Returns

Thankfully, the IRS’ recent decision to share this fraudulent information is allowing victims to take some action to protect themselves.

Following these tips when you receive a payment from the Federal or State government can save you more headaches than you can imagine.

• Tip: Double-check the dollar amount of your refund check before you cash it. Make sure it matches the amount on your tax return.
• Tip: If you have a direct deposit of your refund, only deposit it into one account. This makes matching the dollar amount easier to do.
• Tip: Never cash a check received from the IRS or State tax departments that you cannot tie back to a specific reason or tax filing.

The reason for caution

• Wrong amounts usually mean errors. The error could be yours, or the error could be from the IRS. For example, if the IRS misapplies a quarterly payment or modifies your tax return, they often will send back an amount that does not tie to your filed tax return.
• No explanation. Often checks received from the government have little to no description to help you figure out what the check is for and why it has changed from the amount you expected.*
• Owed money can create penalties and interest. Once cashed, the door is open for a future IRS bill with interest and penalties. For example, a small businessman sent in his quarterly payroll filing. The IRS misapplied the funds, determined the account they applied the money to had no tax, and then sent a check back to the taxpayer. The taxpayer cashed the check. Two years later the business received an underpayment notice along with substantial interest and penalties. The service even applied liens on the taxpayer’s bank account.
• It may mean identity theft or missing forms. A check with an unusual dollar amount could mean the IRS does not have the corresponding tax form on record. It could also mean your taxpayer account has been compromised.

Should you receive a payment that does not make sense to you, please review your tax return and call for assistance. An un-cashed check received in error can often be returned to avoid confusion and hassle when the IRS finally corrects the problem.

*Note: Sometimes the memo line will include interest paid to you from the IRS. This interest will need to be reported on next year's tax return.

What happens when an ex-spouse files a joint tax return with errors in it that you did not know about? You learn that the tax obligation on a jointly filed tax return can be collected in its entirety from either filer. The IRS refers to this as joint and severable liability. Fortunately, there is some protection for the unsuspecting spouse through Innocent Spouse Relief provisions in the tax code.

Example: Jane and John Doe are married. John files the couple's tax returns. Jane signs the returns without knowledge of significant errors in the tax returns relating to John's business. John has lied on the tax return, under-reporting income and does not pay all the tax. John and Jane separate and ultimately divorce. Two years later, Jane receives a tax bill from the IRS for past taxes owed while married to John.

Innocent Spouse Relief defined

Generally, innocent spouse relief refers to a petition by a taxpayer to be relieved of a tax obligation due to a spouse or ex-spouse’s actions. These actions are typically under-reporting income, claiming unsupported deductions or credits, or simply not paying the taxes owed.

In tax code speak, however, there are three main tax obligation relief provisions that are under the “Request for Innocent Spouse Relief” umbrella.

1. Innocent spouse relief. When granted, the innocent spouse is relieved of the joint and severable tax liability of additional taxes due to unreported income or mis-reported credits and deductions.
2. Separation of liability relief. In this case, the IRS divides (allocates) the additional tax owed between the two spouses who are divorced or legally separated. The person who receives the tax relief of understated tax from their spouse’s wrong-doing still probably owes some tax, but not for the unknown obligation.
3. Equitable relief. If the innocent spouse does not receive innocent spouse relief or separation of liability relief, he/she may still be entitled to equitable relief. This often applies to correctly filed tax returns that have unpaid taxes.

Judgment is involved

As you can imagine, there is significant judgment involved in granting this relief by the IRS. To receive innocent spouse relief of tax, interest, and penalties the following conditions apply;

• The couple files a joint tax return.
• The tax return has tax owed due to erroneous items from a spouse (or former spouse).
• When signing the tax return you did not know or have reason to know that the tax understatement existed.
• It would be unfair to hold you liable for the obligation.

The request for Innocent Spouse Relief is a detailed seven-page tax form. Please ask for assistance if you think you need help in this area.

In a recent keynote address to over 1,000 tax professionals in Chicago, John Koskinen, the Commissioner of the IRS, asked the audience to raise their hands if they had personally been contacted by someone pretending to be from the IRS. He reiterated that he was not talking about clients, but those sitting in the audience. Well over 50% of the professionals raised their hands. So did the IRS commissioner.

The scam epidemic

Here is how the scam usually works. You receive a phone call from these would-be thieves representing themselves as IRS employees. They will have personal information of yours to make their demands seem credible. Their goal? Get you to pay them for fake past due taxes. They are demanding credit card payments, wire transfers, money orders, and even gift cards. These thieves often threaten victims with bank account seizure and immediate arrest.

It comes in many forms

This IRS scam is so prevalent, it is coming in many forms.

• Some taxpayers are receiving emails.
• Others receiving phone calls find their caller ID showing IRS credentials. These thieves often read back your personal information (stolen from somewhere else) to add to the believability of their lie.
• They create fake taxes. One of the more recent scams creates a non-existent Student Loan Tax and demands immediate payment from in-debt students.
• They direct you to fake websites.

What you need to know

Identity theft is now so bad, that you can count on this scam happening to you or someone you know. If you receive a phone call from the IRS do the following.

• Do not answer. If the phone ID says the IRS, make them leave a message. There is no need to raise your blood pressure with these low-life thieves. The IRS has recently re-confirmed they will not make initial contact with you via phone or email.
• If you answer, hang up. If you inadvertently answer the phone, just hang up. Do not provide any information to the caller. Do not confirm any information the caller tells you. Dealing with these clowns can only make matters worse.
• Do not fret. You are not alone in receiving this scam. Millions of taxpayers are dealing with the hassle of this theft. So stay calm. Remember, legitimate IRS communication starts with a letter that can be independently verified for accuracy without putting your identity at risk.
• Tell everyone you know. This is important. Young taxpayers, older citizens, and new citizens are common victims of this scam. Help make everyone you know aware of this theft risk. Tell your kids, tell your parents, and tell your grandparents. Awareness is our best defense.
• Report the scam. Follow the instructions provided by the IRS.

As important tax records start filling mailboxes, how can you make sure your tax preparation goes smoothly and efficiently this year? Here are some tips.

1. Keep it all in one place. It seems obvious, but how often have you found yourself going through piles of paper looking for that elusive missing 1099 tax form or charitable deduction receipt? If you only do one thing, this is it. Granted if all you do is this, you end up with a massive jumble of paper, but it is better than missing something.
2. Time to sort. The best idea here is to sort your information into the same buckets as your tax return. At minimum sort the information into the basic categories. If you have a lot of something, then sort into sub-detail categories. A basic list of the more common items is here for your use.

A. Income

• Wages
• Alimony
• Business income (K-1s)
• Interest Income (1099 INT)
• Dividends (1099 DIV)
• Winnings (W-2G, 1099 G)
• Social Security
• Investments (1099 B)
• Other Income Items

B. Income Adjustments

• Student loan interest
• Alimony paid
• Educator expenses
• Moving expenses
• Other education expenses
• IRA contributions
• HSA/MSA contributions

C. Itemized Deductions

• Taxes Paid
• Interest expense (mortgage/home equity)
• Medical/Dental expenses
• Investor/other expenses
• Casualty/Theft losses
• Charitable contributions

D. Credit information

• Child & dependent care expense
• Other credit-related expense
• Adoption expenses
• Education expenses

E. Business/Rental

• Sort income and expenses for each business activity or hobby activity or rental unit.

Note: Remember this list is not all-inclusive, for instance, you will need to retain Form 1095 to prove health care insurance. It is here to help you sort your information into a usable form to make tax filing easier.

• Not sure bucket. There may be things you receive that you are not certain about needing for tax filing purposes. These items should be gathered in one place for review.
• Time to sum. Once the information has been categorized, create a summary of the information. This summary can be a printed copy of an organizer or it could be a simple recap you create.
• Is something missing? Pull out last year’s tax return and create a list of things you needed last year. Use this as a checklist against this year’s information. While this process will not identify new items, it will help identify missing items that qualified in prior years.
• Finalize required documentation. Certain deductions require substantiation and/or logs to qualify your expense. Common areas that require this are: business mileage, charitable mileage, medical mileage, moving mileage, non-cash charitable contributions, and certain business expenses. These logs should be maintained throughout the year, but now is a good time to make sure they are complete and ready to go for tax filing.
• With the amazing mix of taxable income items, various deductions, and credits it is very easy to overlook something. Hopefully, by following these tips that risk is greatly reduced.

Your tax bill is now due and you may be considering paying the bill with your credit card. Is this a good idea? How does it work?

Here is what you need to know.

The IRS has contracted with a few credit card merchants to offer credit cards as a method of payment. Why not? Most of us are used to paying for merchandise from groceries to sweaters with our credit card. Ah, but there is a catch. Stores (called merchants by the credit card companies) pay a fee that is split between the merchant's credit card bank, the transaction processor, and your credit card company for each credit card transaction. This fee, known as interchange, is not going to be paid by the IRS. You must pay it. So how much is this fee?

The "convenience" fee

The fee paid by you for paying your tax bill with a credit card is called a "convenience fee" by the IRS and the credit card processors. The fee is based upon a percent of the amount charged from 1.87% to 2.25% with a minimum charge from $2.50 to $2.69. For example, using Official Payments Corporation's convenience fee of 2.25% with a $2.50 minimum fee, a tax bill of:

• $150.00 would cost you $3.75 • $4,000 would cost you $90.00

But don't forget, if you do not pay your credit card balance in full you must also include the interest cost of the loan you are taking out courtesy of the credit card company. This incremental interest could be as low as 7% or as high as 20+%!

The good news? You can use any of the four major credit cards to pay your taxes; Visa, Mastercard, American Express, and Discover. In addition, you can earn miles and points if you use a rewards credit card.

The bad news? This payment method adds expense to your tax bill.

Better Alternatives?

Remember, if you are considering paying your taxes with your credit card and you carry a balance from month to month you are really taking out a loan to pay your taxes. Using this perspective:

Is there a better loan somewhere else? Perhaps a short term loan from a bank or credit union makes more sense. Could you borrow the money from a family member? While potentially embarrassing, if you create the proper loan documentation, it might be a good way for that family member to earn a nice interest rate.

Consider borrowing from Uncle Sam. There are installment payment plans available for qualified taxpayers. While there is a set up fee, the monthly interest charged by the government is typically much lower than that charged by credit card companies. It is important to review this option as soon as possible to avoid having to pay tax penalties in addition to interest.

Use planning to your advantage. Create a plan to pay for next year's tax obligation throughout the year to avoid a repeat of needing funds to pay your tax bill. This may cause some hardship, but saving a little bit more each week through payroll withholdings is usually more manageable for most of us versus a big tax bite in April.

While paying your tax bill with a credit card is often one of the most expensive ways to pay your tax, there is another method that is vastly more expensive. This is not paying your bill at all. When seen in this light, using a credit card is vastly less expensive than paying high penalties and interest on unpaid taxes.

Wondering why your tax return is not finished? Often the delay can come from one or two items that were overlooked and are needed to complete your tax return. Here are some of the most common:

• Missing Statements. This includes all W-2s and 1099s including any related to gambling winnings, income, interest, and mutual funds.
• Dependent conflict. You claim a dependent on your tax return, but your child claimed themselves as a dependent or an ex-spouse has already filed a tax return with the same dependent's social security number.
• Mismatched names. You recently got married, but did not change your name with the Social Security Administration.
• Missing deduction documentation. Common among them are; charitable contribution recap, medical expense documents, child-care forms, property tax forms, home sales records, pension statements, and retirement forms.
• Waiting for your review. You need to sign your tax return and/or return a signed Form 8879 saying your return is ready to file electronically.
• Receiving documentation late. The closer to the April filing deadline your documents are received, the greater the potential back log of return processing. In tax return processing (and receiving a refund), the early bird not only gets the worm, it also gets the worm faster.

If a missing item is requested of you, the sooner you can provide the information the better. It always takes a bit more time to review your return after setting it aside for a missing item.

What to do if your e-filed tax return is rejected by the IRS

With nearly 70% of individual tax returns now being filed electronically, many of us take the filing method as a matter of course. And in most instances it is. However, when an e-filed tax return is rejected filing can become more complicated and more important.

Common causes for rejected tax returns

Simple filing errors. When an e-filed tax return is rejected the IRS e-filing system sends back reject codes. These codes are specific to lines on the tax return and descriptions of the problem are readily available. Most of these errors can easily be corrected. Perhaps the rejection is caused by a misspelling, a typo on a social security number, or a missing form.

Dependent Errors. This common error occurs when someone else has already claimed a dependent on a previously filed tax return. This often occurs with divorced and unmarried couples each claiming a child on their tax return. The IRS does not take sides in this situation, they simply take the earlier filed return and reject any subsequent returns.

MeF Errors. The IRS has a dynamic e-filing system called “Modernized E-Filing” that replaces the traditional “batch” based e-filing system.

Identity Fraud. Someone else has already filed a tax return using your social security number.

What to do?

Most errors are simple, are easily corrected, and your tax return is resubmitted for filing without much additional delay. However there are two instances that require your immediate attention. When either of these occur, you will need to file your tax return via the mail and work to correct the error for future tax filings.

1. Dependent Errors. A dependent can only be claimed on one tax return. If a dependent is already claimed on another individual's tax return you will need to provide proof that the dependent belongs on your return. This substantiation will need to be submitted with a paper filed return. In the meantime, you should contact the other party who claimed your dependent and ask them to amend their return. Let the other party know that you’re filing your tax return correctly claiming the dependent. Your filing will target both of your returns for an IRS audit. This audit risk often is enough motivation to correct the problem.

2. Identity Fraud. The incidence of identity fraud is going up dramatically. Thieves are stealing names, addresses, and social security numbers (often from healthcare providers and health insurance records). Then the criminals are submitting tax returns electronically using tax software from places as innocent as a local coffee ship with wi-fi access. Fraudulently claimed refunds are then automatically deposited into their bank accounts. By the time anyone finds out, the accounts are closed and your withholdings are stolen. If this happens to you:

⇒ File a paper tax return.

⇒ Include form 14039: Identity Theft Affidavit with your tax return.

⇒ Attach copies of your Social Security card, drivers license, and/or passport with your tax return.

⇒ Consider mailing your tax return using Certified Mail with Return Receipt Requested so you are certain of timely delivery.

⇒ Immediately take steps to protect your financial information. The following link will take you to the Federal Trade Commission's identity theft area for recommended steps to protect yourself.

FTC Identity Theft Assistance

While solving the cause for a rejected e-filed tax return can be a headache, the sooner the problem is addressed the sooner your refund can be received.

The popular “Where’s My Refund” feature on the IRS web site (www.irs.gov) allows taxpayers to see the status of their refund after filing their income tax return.

What You Should Know

Refunds of e-filed returns usually take 10 to 21 days to process. Paper returns take longer than e-filed returns. The IRS states that 90% of refunds are processed within this 21 day time period.

Original refund processing projections can change. This can be due to processing backlogs, or errors in your tax return.

Sometimes a delay is a good thing. The IRS has acknowledged there is a huge increase in identity fraud as thieves try to steal tax withholdings. The IRS is using their data match programs to catch as much of this illegal activity as possible. This means the IRS will often intentionally slow down your refund while it runs your tax return through new fraud safety measures.

Using "Where's My Refund"

In the meantime, if you wish to check on the status of your refund this is what you should know:

Log on to: www.irs.gov and click on "I'm Waiting for my Refund."

When to check:

24 hours after an e-filed tax return confirmation (usually within 2 days of e-filing)

4 weeks after a mailed tax return is sent

What you need to provide:

Social Security number

Filing Status

EXACT refund amount

Remember, the information provided to you by the IRS is not a guarantee of payment. So please fight the urge to spend your refund before you receive it. Unfortunately, no amount of calling or checking will change the speed of returning your money. With 140 million tax returns processed each year, sometimes all you can do is wait.

Is it always a good idea to amend your tax return?

There's usually an element of relief after your annual tax return has been filed. But what do you do if you find an error on your tax return? Should you always file an amended return? Here are some things to consider.

Errors in the IRS' favor

Errors discovered that lead to an additional tax obligation are legally required to be fixed by filing an amended tax return. This is especially true if the discovered error is from missing information found on a 1099 form or W-2 reported income. Why? This information is being reported to the IRS and matching programs will typically catch the error. The sooner you amend your return and pay the tax the lower the possible interest and penalties.

Errors that result in lower tax

If correcting the error or omission results in a large additional refund the answer is usually obvious. File the amended return. But this is not always the case.

Your tax return may be open to audit for a longer period of time. Federal tax returns are typically subject to audit for three years after the original tax return due date OR the date the return was filed whichever is later. If your amended return is filed towards the end of the audit limits, additional time is automatically added. If the IRS wishes to review your return they may request you extend their review time. So if you have other areas in your tax return that might be audit risks you may have second thoughts regarding amending your return.

The amended return may become examined. Amending a tax return could put a spotlight on your tax return. The IRS has certain topics that could trigger individual examination when amended returns are requested. Amended tax returns based on things like the Earned Income Tax Credit, Small Business Income and the Research Tax Credit for small businesses, could result in a visit from your local IRS examiner. Do you have the necessary records to substantiate your amended tax return?

Amending one tax return, may require amending a number of them. Making a minor change in one year may require you to make changes in other tax years. This could result in resetting the audit clock on as many as three to four tax years. Is it worth it?

Don't forget other taxing authorities. Making a change on your federal tax return may require you to file an amended state or local tax return. Do not assume that an amendment in your favor on the federal level will necessarily be in your favor on the state/local level.

Don't expect the refund to be timely. Amended tax returns can take a long period of time to be reviewed. There have been cases where the IRS has delayed initial review of an amended return for more than a year, then decided to examine the return. While not typical, the process could take up to 1 1/2 years to resolve.

Timing is important. Remember there is also a time limit to request a change in your tax return and receive an additional refund. This is typically set to three years after the initial filing deadline of the tax return. Make sure you file these tax returns using certified mail. Should the IRS delay responding to your amended return, you may need to prove it was filed timely.

You have a chip in your pocket. If the refund amount is not large enough to justify an amended tax return, still keep the documentation. Should you be chosen for an audit, you can often present your case at that time to offset any additional tax.

While finding an error or omission on your tax return can be unsettling, rest assured there are ways to fix the problem, but it is often worth taking a balanced approach to determine the best solution.

Using the IRS Audit Technique Guidelines (ATGs)

While most of us are never audited, when it happens it can feel a lot like a lamb thrown in the room with a lion. The IRS auditor does these audits every day. They know what to look for and can ask leading questions that you may easily answer incorrectly. So what are some good tips when you are in the cross-hairs of an IRS audit?

Address correspondence issues with the IRS timely. Do not let the problem get to a point that a face-to-face examination is required.

Ask for help. Do this right away. Too many clients think the problem is easy to resolve, but inadvertently say the wrong thing or open another audit issue inadvertently.

Understand what is being asked. Clearly understanding the core question can simplify the solution. Why is the IRS asking to see your 1099’s? Do they have a form that you do not? Why are they asking about your small business profits? Are they thinking your business is a hobby?

See the Audit the way the IRS auditor is trained to see it. The IRS has certain areas in which they focus training for their auditors. These are published in Audit Technique Guides (ATGs) and are available for review on their web site at www.irs.gov. They are invaluable in identifying areas for potential audits AND can help you understand what the IRS likes to question. While most of the ATGs are in the business area, reviewing the topics can be useful in understanding where audit risks are and what you can do to prepare yourself in case of an audit.

Common ATGs

Architects

Business Consultants

Child Care Provider

Farmers

Ministers

Veterinary Medicine

Art Galleries

Capitalization versus Repairs

Construction

Hobbies (activity not engaged for profit)

Partnerships

Winery/Vineyards

Attorneys

Cash Based Business

Research Credits

Lawsuit Awards/Settlement

Retail

If you have activity in one of these areas, it may make sense to understand what the IRS auditor is trained to look for prior getting too far into the audit process. By reviewing the specific ATG you will know the process of the IRS audit and understand how the auditor will proceed.

With the backlog of tax return filing due to late changing tax laws, want to ensure your refund gets to you in the shortest amount of time? More importantly, how can you avoid receiving a letter from the IRS? Here are some of the most common tax filing mistakes:

Forgetting a W-2 or 1099: The IRS does an effective job in comparing W-2s and 1099s they receive from organizations to the amounts you claim on your tax return. If they do not match, rest assured you will receive a notice in the mail asking for clarification.

The 1095 form: Through 2018, all taxpayers must now prove they have valid health care coverage for themselves, their spouse, and their children. This is done with Form 1095. Make sure you receive yours prior to filing your tax return.

Duplicate dependent reporting: If more than one tax return claims the same person as a dependent, the second return will be rejected. The IRS does not try to determine which tax return is correct. They leave that up to you.

Forgetting a name change: If you fail to change your name with Social Security after marriage and you file a tax return with your "new" last name, be prepared for either a rejected tax return or an adjusted tax return.

Other missing information: When preparing your tax return, often the return is held up because key information is missing. These missing items range from property tax and mortgage interest statements, to 1099s and W-2s.

Signing the e-file authorization form: Your tax return cannot be e-filed without proper authorization. After reviewing your return, a properly signed Form 8879 must be received.

Post tax filing record retention

With a sigh you are relieved that yet another tax return has been sent off to the government. Another 12 months before you need to do this again. But before you close that tax file, there is still some work to do. If the IRS or state revenue department selects your return for review, you will need to be prepared. Here is what you need to know:

Record Keeping Tips

As long as they are needed. The IRS says you should retain documentation for as long as they are needed to support your tax return. Normally tax records should be kept for three years from the later of the tax filing due date, the date you filed your taxes, or the date you paid your tax in full. But be careful, others may want it for a longer period of time.

Some documents should be saved indefinitely. This includes things like:

Your tax return

Records related to a home purchase or sale

Stock transactions

Business/Rental records

The IRS does not require any special record keeping system. You just need to keep all documents that can support information on your tax return.

Here are common records worth retaining:

Canceled checks

Invoices

Other proof of payment for claimed deductions

Bank and credit card statements

Mileage logs

Receipts with time; place; and purpose noted

Be mindful of other record retention requirements

State record retention requirements are often 6 months to 1 year longer than Federal requirements

Social Security records often need to be proofed to ensure they match your pay stubs

Insurance, banking, and estate management may require other records

Federal retention requirements become 6 years if your return understates your tax obligation by more than 25%, and the record retention period is indefinite if fraud is involved.

Keep a good system

So the build up of paperwork does not overwhelm your attic, at the end of the tax year rotate your records. Decide how many years of records must be retained. Then count back from your current tax return filing year and shred unneeded, older documentation. Create new empty files for the current tax year to save receipts for the coming year. Consider scanning records to keep digital copies. A final word of caution. If you are unsure whether to retain or shred, keep it unless you know the document can be replaced.

Retaining copies of your federal tax return is important. Not only will you need the return in case of audit, but the tax return is often used to secure student aid, obtain loans, purchase a home or business, plus much more. What can you do if you cannot find a copy of your tax return?

E-filed tax returns have their data stored in software. One of the benefits of e-filed tax returns means there is a digital copy of your tax information. If necessary another digital copy could be produced.

IRS requested transcript. The IRS can provide you with a transcript of your current tax return or transcripts from the prior three years. To request a transcript from the IRS using their online tool go to www.irs.gov and search for their order a transcript tool. Information will be provided to you within approximately 5 to 10 business days.

Request an actual copy. If you require an actual copy of your tax return, one can be provided for $50 by filling out Form 4506. But plan accordingly, as it can take up to 75 days to process your request.

Copies of informational returns. If you are missing a W-2 or 1099 you can also contact the company that originally issued the tax form. They will have these forms on record for their own audit purposes.

Copies sent to third parties. Your request for transcript can also be sent to a third party with your authorization. If you wish to take this route, please note that you may lose some control as to who has this personal information.

Understand the different transcripts.When making a request for a transcript from the IRS you need to understand what you are requesting.

Return transcript. This includes most of the lines of your tax return as originally filed.

Account transcript. This is the status of your tax account. It includes the balance owed on your account, any record of any payments, and adjustments after the return was filed.

Record of account. This is a combination of the return transcript and the account transcript.

If need be, you can also request a verification of non-filing of a tax return.

A U.S. Supreme Court ruling involving the state of South Dakota vs Wayfair (an online furniture retailer) opens the door for states to impose sales taxes on online retailers located outside their borders.

This will have wide-reaching effects on small businesses and consumers. Here’s what you need to know:

Who benefits?

State governments. States will be able to collect hundreds of millions of additional tax revenue from purchases made at Amazon, Overstock and other online retailers.

Brick-and-mortar stores. Physical stores that are collecting sales taxes will no longer be at a price disadvantage with online competition that hadn't been.

Who loses?

Online businesses. Not only will online sellers likely have to raise their effective prices to pay the state taxes, they now may have to contend with a complex patchwork of state and local tax jurisdictions.

Consumers. Consumers that had been enjoying lower taxes on online purchases are likely to have to pay more after this ruling.

Small businesses. Trying to keep track of 50 different sets of sales tax rules and complying with this ever-changing rate environment will be difficult.

Some background

The federal standard in place since the 1990s is that states can only impose tax collection on businesses that have a physical presence within their borders. Many states try to get around this by imposing “use taxes” on consumers who make purchases from out-of-state retailers. But use taxes collection is hard to enforce and are widely ignored by taxpayers.

In the recent Supreme Court ruling, South Dakota successfully challenged the physical presence standard in favor of “economic presence,” allowing states to require businesses to collect these taxes even if they are located elsewhere.

The small business dilemma

This ruling may be concerning to small business owners who have customers outside their home state. The risk is that small businesses may now have to register and comply with complex tax filings in all 50 states, and maybe even thousands of local jurisdictions as well. But keep in mind that:

The ruling is based on South Dakota’s simplified tax structure, which collects only at the state level, avoiding the complexity of local tax compliance.

South Dakota has a compliance threshold that exempts small businesses with less than either $100,000 in sales or 200 transactions of products or services delivered into the state.

Further events may follow:

State governments will have to put their collection systems in place, which will take time. Some will first need to pass new laws authorizing the taxation of online transactions using the economic versus physical presence standard.

Congress may feel compelled to act with legislation simplifying the tax jurisdiction of state and local governments.

There’s no doubt the Supreme Court ruling has caused the ground to shift for any businesses selling outside their state, and the total effect of the changes is still unknown. Call if you have any questions about this or other tax matters.