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Why should I check my IRS tax status?
If it’s been a few years since you filed a return, it’s vital that you check where you presently stand with the IRS. You may already have some idea of your situation if you’ve received official letters from the agency.
If you haven’t responded to those IRS notices, you may have an unpleasant surprise in the form of a substitute return. In a Substitute For Return (SFR), the IRS uses third-party information to complete the return on your behalf. However, this filing omits itemized deductions and exemptions, substantially increasing your tax liability.
The good news is that you can avoid this situation by contacting the IRS to discuss affordable payment options. The IRS is more flexible than you might think when it comes to helping you clear your tax liabilities.
One option is to set up a tax payment plan that allows you to pay off your debt with monthly payments. Another option is an offer in compromise which lets you settle your debt for less than the total amount owed. While these options may not be suitable for everyone, they provide a way to get out of debt and back on solid financial footing.
Of course, the only way to keep your tax status current with the IRS is to make sure your financial records are organized and taxes filed. Bench bookkeeping (that's us!) helps small business owners by completing your past bookkeeping quickly to prepare you for filing. Learn more or chat with our team to discuss your options.
The benefits of checking your tax status
Whether you have an outstanding tax liability or just want to double-check, it’s always a good idea to know your current federal and state income tax status. If you don’t check your tax status regularly, you may not be aware of accrued interest and penalties. For example, even if you file your annual taxes on time, the IRS will impose interest and penalties on your quarterly taxes if they’re late.
Paying attention to your taxes is also essential to keeping your business running smoothly. Numerous tax laws apply to small businesses, and failing to comply with them can result in hefty fines. Plus, if you’re audited, it’ll be much easier to prove that you’ve been paying your taxes correctly if you have the records to back it up.
If you have difficulty finding the time to file your taxes, Bench also has tax pros who can file for you, so you’re free to focus on the day-to-day operations of your business.
Sources to check your federal income tax status
The IRS offers several ways to check if you’re on track with your tax obligations. By using the following resources, you’ll be able to check on actions the IRS may have taken on your account and get a clearer picture of your tax status.
IRS website
The most efficient way to research your federal tax status is by setting up an online account on the IRS.gov webpage.
As of 2022, creating your online account requires ID verification through ID.me. You’ll need a government-issued ID such as a driver’s license, state ID, or passport and your Social
Security number to fulfill this obligation.
The photo on your government ID will be compared to a selfie you’ll take with your smartphone or webcam. An alternative method is available via live video call with an ID.me representative.
Once identity-verified, you can complete the sign-up process to access your tax information.
Upon accessing your account, select View Your Balance to obtain your current tax liability balance by tax year. You’ll be able to see the principal amount, plus any interest and penalties you owe.
The Make and View Payments menu option contains your payment history from the past five years, including estimated tax payments. Any pending or scheduled payments will also appear here.
The Access Tax Records option will show you data from recently filed returns and your adjusted gross income. You may also access transcripts of your tax records. If the IRS has sent you notices, digital copies will appear here.
If you only need the status for a tax refund, a dedicated Get Refund Status website contains this information. You will need your Social Security number, filing status, and refund amount to obtain your refund status.
How to request your tax status by mail
If you don’t have online access to obtain your tax information, you can request an account transcript from the IRS by mail. However, each transcript only covers one tax year. The most recent penalties, interest charges, or any pending actions won’t be reflected in the transcript.
If you’re requesting an account transcript for returns that require forms other than IRS Form 1040, submit Form 4506-T, Request for Transcript of Tax Return.
How to request your tax status by phone
Calling the IRS may be the least favorable method to obtain your tax status due to long hold times. If you’re going to call, make sure to have a copy of your last return handy to verify your identity and taxpayer ID or Social Security number. Have a list of questions and concerns you want to cover with the agent. The last thing you want to do is end your call and realize you forgot to ask for additional information.
The phone number to call for information on your small business taxes is 800-829-4933 from 7 a.m. to 7 p.m. local time. Note that call wait times average 13 minutes during filing season (January-April), with higher wait times on Mondays and Tuesdays and around tax filing deadlines. During the post-filing season (May-December), wait times average 19 minutes.
Additional ways to find your tax status
Arrange an in-person meeting
You may also request an appointment to meet with a tax representative at a local IRS office. Search for a location by your address or zip code from the Taxpayer Assistance Center Office Locator.
Authorize a third party to act on your behalf
Suppose you’re uncomfortable communicating with the IRS. If that’s the case, you can authorize a third party, such as a tax professional, to act on your behalf by completing IRS Form 8821 Tax Information Authorization. You can also authorize the party through a power of attorney to speak to the IRS on your behalf by filling out IRS Form 2848.
How to check your state income tax status
After verifying your federal income tax status, you can do the same with your state income tax records by contacting your state’s tax agency directly. They’ll provide you with information on your current tax status. You can find links to state websites on the IRS’s State Government Websites page.
Most states have an online portal where taxpayers can access their account information. You can also check your state income tax status by requesting a copy of your tax return from the IRS. If you filed your taxes electronically, you should be able to access a copy of your return through the IRS website.
What’s the fastest way to get your tax status?
Waiting is always the hardest part when contacting the IRS about your tax obligations.
The amount of time it takes to receive a response to your inquiry depends on how you communicate with the IRS, if you filed electronically or by mail, and the complexity of your taxes.
For example, an individual taxpayer will receive their tax status sooner than an S-corp would, since the returns are simpler than a corporation’s.
A significant benefit of electronically filing your business taxes is that the IRS automatically updates your records. This is essential in order to receive up-to-date information on your tax status.
You’ll receive a faster response if you contact the IRS through your online account instead of mail correspondence. A case in point is that the IRS states on Form 4506-Request for Copy of Tax Return that it can take up to 75 calendar days to receive your requested forms by mail.
Calculating your tax liability from notices the IRS mails isn’t efficient, as the balance doesn’t include interest or penalties assessed at the mailing time. Additionally, the IRS only sends a notice for each year of taxes owed. As a result, if you have tax debts from other years, you’ll need to total the tax debt amounts from each year to arrive at your current balance.
To expedite your current tax status, checking online or calling the IRS are your best options. Remember that if you’re checking your tax information online, the IRS updates interest and penalty data every 24 hours. Additionally, note that it can take one to three weeks for your tax payment to post to your account.
The bottom line
Finding out your tax status with the IRS is relatively simple and can be done through the IRS’s online tools, by mail, or by phone. If you’re behind on your taxes, it’s essential to find out how much you owe so that you can begin resolving your tax debt. The longer you wait, the more interest and penalties will accrue, making your overall tax burden larger—and even potentially leading to wage garnishment or property liens.
