Tax season is coming upon us, and many employees are wondering how long their current or previous employers have kept their W-2 forms on file. Record retention varies depending on the documentation that is in question, but there are specific regulations regarding W-2 retention. The Internal Revenue Service (IRS) can actually audit small businesses for up to three years prior to the current tax year. This is why it is imperative to learn employer retention regulations whether you’re an employer or an employee.
If you’re looking for your W-2 forms from a few years back, you’re in luck. The IRS orders business owners to keep these documents on file for up to four years. Many employers choose to keep them longer just in case, but the federal requirement when it comes to Copy D (employer copy) W-2 forms, the general rule is a minimum of four years. If you’re looking to obtain copies of your W-2 forms within this time period, your employer should be able to send them to you within 30 days of your request.
If you never received a W-2 when you were supposed to, your employer should still have a copy of your W-2 for the year in question up to six years prior. Some W-2’s end up coming back as “undeliverable”, and the IRS requires these W-2’s to be kept for a six-year minimum. The six years should start after the initial delivery date. If you changed your address, or the form got lost in the mail, you will still have access to the forms in question as long as it is within that six-year timeframe.
Filing taxes is a hectic process for many, so it is not uncommon for tax forms to be misplaced somehow. Thankfully, no matter how small the company you work for is, they are still required to retain W-2 forms for the four-year timeframe. By contacting your employer and requesting a copy of their Copy D form, you will be all set for any future dealings regarding those specific W-2’s.
Most banks, legal institutions, tax firms, legal firms and even government agencies can request IRS tax transcripts for various reasons. The retrieval process for tax transcripts can be cumbersome and tedious, involving signing up online, waiting for verification via mail, calling the IRS or a combination of all. Providing a tax transcript is, sometimes, critical to closing a deal on a house, getting a mortgage approved or for immigration purposes. A streamlined, safe yet fast method to getting your tax transcript can solve all these issues.
At 4506-Transcripts.com, we streamline and simplify retrieving the IRS 4506 form process. The team ensures accuracy and quality by performing thorough reviews of client information to expedite retrieving a tax transcript.
Our team of staff is well trained and professional. We standardize our work process into a series of well-organized steps and strive to avoid delays due to rejections. Any surprises resulting from uncertainty or lack of clear direction is removed since our staff knows exactly the information to provide to the IRS.
Our streamlined workflow is organized into the following steps:
1) The client will fill out an informational form and return it to4506-Transcripts.com.
2) A trained professional staff member will review the form for accuracy and request any additional information from the client if something is missing.
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It’s not uncommon to wonder if filing a 4506-T form might trigger an IRS audit. Some borrowers are hesitant to file the 4506-T out of concern that any discrepancy between their loan application and their prior tax filings could lead to an audit or even a mortgage fraud investigation. While the execution of a 4506-T form will not trigger an automatic audit, it is important that the form exactly reflect the name, address, and amount of income on previous tax returns.
So what is the 4506-T form? The 4506-T, also known as the Request for Tax Transcript Form, gives your lender authority to request verification from the IRS for the income you reported in the prior one or two tax years. This form is used by lenders to avoid extending loans to borrowers who are claiming income lower than what they have actually paid taxes on.
Discrepancies between the 4506-T form and filed tax returns may not trigger an automatic audit but it can have consequences. The data from every 4506-T filing is added to the Discriminant Inventory Function System. This system is used to analyze any discrepancies between 4506-T filings and previous tax returns with the intent of uncovering unpaid taxes or fraud. This system will not raise any red flags with the IRS if a loan applicant’s information matches perfectly. There are a few tips that can make 4506-T filing hassle free and avoid entanglements with the IRS:
- Obtain a copy of the previous two tax returns before filing the 4506-T, making certain the information matches
- Obtain a copy of the W-2 from an employer and cross-reference it with the 4506-T form.
- Alternatively, obtain a copy of a previous W-2 from the Social Security department.
While a 4506-T filing won’t trigger an audit, the best practice is review previous tax filings to make sure there are no errors and that the filing information matches the 4506-T exactly.
Fannie Mae and Freddie Mac require mortgage lenders to obtain an income tax transcript from the IRS for each loan applicant. The tax transcript is necessary to verify the income of the borrower. Lenders can remain in regulatory compliance and ensure the quality of their loan underwriting by using IRS Form 4506-T to request tax transcripts.
Form 4506-T allows a prospective home buyer to authorize a third party to receive the tax transcript. The name and address of the mortgage lender is entered on the form to designate the lender as the third-party recipient. Form 4506-T is essential to a lender because a tax transcript contains data from all the supporting forms of an income tax return.
Comprehensive nature of a tax transcript
Many home buyers are somewhat familiar with their Form 1040, but they may not be able to locate the other forms that comprise their tax return. By requesting a transcript with Form 4506-T, a lender has access to the entire tax return. For instance, a mortgage applicant may have filed additional forms to report rental income or business expenses.
Availability of multiple years
Lenders may need tax information for more than one year to obtain a clear picture of a loan applicant’s financial history. Form 4506-T can be used to request a transcript for up to four separate tax years. In addition to transcripts for individual tax returns, transcripts can also be obtained for partnership returns and corporation returns.
Availability of informational documents
In addition to income tax returns, Form 4506-T can be used to receive copies of informational returns such as Form W-2 and Form 1099. Since these informational documents are provided directly to the IRS, the use of Form 4506-T provides further verification of the income of a loan applicant. Lenders can request transcripts by contacting a provider of IRS tax transcripts.
Businesses work in tight timeframes and each minute in business has to count. Tax return filing and generation of forms from the Internal Revenue Service(IRS) has been made quick, easy and efficient. Technological advancements over the recent past have made tax verification easy as the services have been digitized. Some of the institutions that can use our services include financial institutions and law firms. Banks, lenders and law firms can have access to their client’s information within a reduced time frame that helps them to know their genuineness before they can lend their services to them.
Honesty between a business transaction is of essence but not all people are honest. People have at times complained of being conned or had a transaction with a fraudster. Our services will help you have access to a person’s history on the tax return filing. Having information on a client based on their history will help you make the right decision to avoid any inconveniences that may arise thereafter after transacting.
Our services will help you in retrieving tax receipts from the IRS in easy and simple steps. Our services assure efficiency, accuracy and good communication with the clients through the entire process of form retrieval. We ensure that you receive your documents as soon as possible with our fast delivery plan. One of the major service provided is the IRS transcripts that provide resourceful information about a client. One can also request for their social security forms by processing them from our services. This has been made possible through the integration of our services.
We offer our services, retrieving IRS forms, in case one is filing tax returns, processing a mortgage loan, immigration applications and also when applying for student loans. Our services can also be very helpful as proof of tax filing in case of any legal inconveniences.