How The IRS Finds Your Assets
Unveiling Secrets: How the IRS Tracks Your Assets
How The IRS Finds Your Assets
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Locator Service Programs
Automated Locator Service Programs aid the IRS to track down taxpayers’ assets. The IRS maintains a system to operate these programs, which supply valuable information to their agents. These services are not open to the general public, but other governmental agencies also access them for data purposes.
The largest source for collecting information is the Internet
- The Internet is a powerful tool for gathering information about individuals and businesses. The information on the Internet can assist IRS employees in locating taxpayers and their assets. A great amount of information is available free of charge although many web sites charge a usage fee or provide information on a subscription basis. Effective use of the Internet can include the use of various websites to locate taxpayers and their assets. Taxpayers can use the same information that the IRS uses on the Internet.
- The Internal Revenue Service has current corporate contracts for locator services such as credit bureau services, and tax law research services and others.
- SPDER provides IRS employees with Internet (internal tools) – Intranet access on an as needed basis. These are protected secured sites that usually government agencies have right to tap into.
- Internet/Intranet access provides IRS employees with access to a number of computer applications including:
- The National Asset Locator tool, Accurint. This tool is used by almost all revenue officers when working field collection cases. You can subscribe to this service as well;
- The Credit Bureau Web browser, Smart.Alx;
- The tax research portal — LexisNexis this is used primarily for legal research.
- The IRS Intranet Home Page. These are restricted sites
How The IRS Finds Your Assets
Asset Locator Research used by IRS agents
- All IRS employees are required to carry out research using public records, both online and in person, to locate taxpayers and their assets in all cases. To make this process more efficient, the IRS has a nationwide corporate contract for online asset locator research that provides access to public records such as real estate transactions, property ownership, corporate officers, vehicle registration, boat registration, aircraft ownership, and information on individuals and businesses.
- In addition to the national asset locator tool, there are vast resources on the internet that can be used as a supplement for research. These resources are easy to use and can result in the discovery of tax fraud while also ensuring high-quality case work and customer service. Using these tools can lead to tips and leads which make searches easier and require little to no effort.
Real Property Records
- The IRS relies on real property records to find taxpayers and their significant assets, and these records can often be found online. While not fully automated everywhere, anyone with a computer can access them in most places.
- Some large cities and states enable digital access to records at courthouses without the involvement of third-party vendors.
- Although some collection areas provide direct database access, the varying systems found across different cities and counties can make it difficult to standardize.
- Real property records are currently available for all 50 States and the District of Columbia through the national asset locator tool, making them accessible nationwide.
Summons Enforcement
It is important to note that the IRS has the authority to obtain third-party records through summons and subpoena power. By reviewing credit card statements, the IRS can often request loan applications to identify assets listed on the application.
Tax Law Research
The Service currently holds corporate contracts for tax and legal research services which are overseen by Service-wide Policy, Directives, and Electronic Research.
- Although IRS agents have the option to conduct tax and legal research using popular search engines like Google, MSN, Yahoo, or AOL, they typically use commercial electronic research services held by the IRS.
- These services are primarily used by the CID and large dollar case groups. The electronic research services include cited references which provide access to all tax law research material from one location.
- The IRS collection division makes use of these services on a limited basis, primarily in larger dollar cases.
Department of Motor Vehicles
Each state and the District of Columbia has a Department or Office of Motor Vehicles DMV that requires state residents who own or drive a motor vehicle to register it and hold a valid driver license.
- In addition to driver licenses, motor vehicle departments issue identification cards for identification purposes only. Various motor vehicle departments maintain different information such as driver information, secured ownership information, lien holders, and vehicle information, and also provide ID card information.
- The IRS has gained access to information from twenty-five state motor vehicle departments, which can be used to locate individuals who have not filed their tax returns and even seize their car.
- However, some states are not available due to legal restrictions preventing information from being made public. Some collection areas have found ways to gain direct access to motor vehicle records.
Uniform Commercial Code
National Uniform Commercial Code (NUCC) filing records encompass details of commercial lien filings and are commonly housed in cities where the state capital is located. These records bestow crucial information to discover assets used by companies for commercial loans and grasp financial connections between individuals and firms. The outcomes of this approach involve identifying debts and liens against a company, understanding how a business finances its inventory, and recognizing financial obligations that affect the company’s decisions. Therefore, accessing NUCC filing records can be immensely valuable for various purposes such as business analysis, due diligence investigations, and legal proceedings.
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Uniform Commercial Code information is currently available for all the states and the District of Columbia.
How The IRS Finds Your Assets
Corporate Information — Secretary of State
- Corporate information is available through state Secretary of State offices or equivalent agencies, such as the State Corporation Commission.
- Registration is required in all states and D.C., with incorporation date and officer details maintained and accessible in the state capital. This information is crucial for corporate accounts, as it provides third-party data on officers and registered agents, and can verify asset existence.
- However, information effectiveness differs by state and access method. Secretary of State information is presently accessible for every state, including D.C.
State Employment Commission Program —Tape Exchange Agreements
- The State Employment Commission Program works by exchanging tapes between different regions and states where a file of individual taxpayers is mailed every fortnight. This file contains records of taxpayers who have received fourth notice and final notice, and is sent based on the controlling location code of the taxpayer.
- The tape also contains records for primary and secondary Social Security Numbers. The receiving state matches the social security numbers on the tape with their own employment commission database in order to provide information about the taxpayer’s employers and levy source.
- If a matching record is found, a levy source record is created on the IRS computer system and forwarded to automated collection systems when necessary. The levy source record will also identify whether the primary or secondary social security number is associated with the levy source.
- This program is an effective method for locating levy source information.
Other Tools
The IRS has a highly reliable tool for investigations – observation. In case your case is transferred to the field office, there is a high possibility that the revenue agent will conduct a field visit to your business or house. During this visit, the agent can examine the situation and understand the scope of the case. This method has been proven to be highly effective and rarely incorrect.
*This information was sourced from IRS.GOV website and modified by Dreis Tax Services, a seasoned expert who has experience as a tax professional. If you have any questions, you can reach out to us via call, email – contact us today at (509) 294-0423.
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