Your tax returns are very important documents because they are usually the best way to prove your income. It’s always important to keep your tax returns stored away both in a place you can store printed copies, or electronic copies such as a computer hard drive, removable media, cloud or email servers. But on occasion tax return copies can still get misplaced when you need to have them handy. In such cases when you need to find a return that was made a two or three years ago, you may need to ask the IRS for a transcript.
What An IRS Transcript Is
A transcript is basically an abbreviated copy of your tax return that’s IRS certified and is easy for other parties to verify. A transcript not only can replace a lost tax return copy, but in some cases it may actually be preferable to a regular copy particularly if your tax return forms contain an overwhelming amount of income or royalty information. With a verifiable tax return transcript, the parties who are inquiring on your income can find the most pertinent information without having to sift through pages of numbers.
What A Tax Return Transcript Is Needed For
Whenever you apply for funds in the form of loans or even federal grants, banks, lending institutions, and federal agencies usually need to see your tax returns. The reason for this is to prevent fraud or deceptive practices by borrowers who might try to take out more money than they’re qualified for, and to make sure that they can repay amounts they’ve borrowed. And when a Form 4506 T is filled out you can specify the inquiring parties name and address so that they know the form is coming directly from the IRS in the mail. In some cases you can have a third party process the form if you need the tax return transcript expedited.