IRS transcripts - essential tool for tax practitioners: if you are encountering ACS and pains because the PIC in your BMF was caused by an FTD, maybe it's time to yell STAUP!(automatic collection system, penalty indicator code, business master file, failure to deposit, status update code request)

• Author: Burquest, Patti

Plain English translation: if the Automated Collection System is hounding you because your Business Master File account shows a Penalty Indicator Code for a Failure to Deposit, maybe it is time to request a STAUP code to suspend all collection activity while you investigate the penalty. But how does a company discover what is causing the Collection activity in the first place? The answer is to review the transcript and decode the mystery.

Virtually all information collected by the IRS from tax returns, information returns, taxpayer filings, IRS activities and correspondence are entered into a system of IRS records called the Integrated Data Retrieval System (IDRS). IDRS allows instantaneous visual access of taxpayer accounts by authorized employees. (1) Data from IDRS is extracted through the processing of various command codes (CCs) that cull defined data from the database into a report that is focused on a specified taxpayer, tax filing and tax year. (2) Commonly used command codes that produce reports or "prints" are often referred to as "transcripts." These transcripts are a useful source of information that can assist taxpayers in addressing penalties and interest, correcting account errors, tracking payments, refunds and transfers between years and accounts, (confirming tax account adjustments including assessments, payments and refunds) and identifying "entity" data that the IRS has recorded. This article introduces IRS transcripts that taxpayers can request to assist them in managing their tax status and tax filings.

Transcripts can be obtained by practitioners who are authorized representatives of a taxpayer and who are listed on a Power of Attorney Form 2848, or Tax Information Authorization Form 8821, by calling the IRS Practitioner Priority Service (PPS) (3) and confirming their authorization. The PPS is generally staffed by IRS employees from the Tax Account Management or Customer Service units in the various service centers throughout the country. When not assigned to answer practitioner calls, PPS employees may also process returns and input tax return and account data into the IDRS system. The knowledge and experience of PPS employees (and their supervisors) can vary significantly.

Experienced PPS employees can provide insights into account data to assist taxpayers in managing their tax accounts and tax information. Inexperienced PPS employees (and their inexperienced supervisors) may be hesitant to assist taxpayers in solving account problems. There is no direct line to an experienced PPS employee; thus, success in identifying account errors or solving account problems involves knowing the type of transcript you want to request, articulating why you need that particular data, and a fair amount of patience and persistence to get the data you need. If an inexperienced PPS employee is unable or unwilling to assist in providing information that should be available to the taxpayer or its authorized representative, a cordial "thank you and goodbye" followed by another call to the PPS increases the likelihood of assistance by an experienced PPS employee. Patience, cordiality and persistence are the key elements to success when calling the PPS. Transcripts are provided to practitioners via mail (taking 2 or more weeks) or fax (taking no more than a few hours.)

A Reference Guide to Transcript Data

For most account issues, the following IDRS transcripts and command codes may be helpful to identify account attributes, correct errors, prepare carryback claims, locate lost refunds or determine the nature of assessed penalties.

ENMOD (4)

The ENMOD is an IDRS command code that culls "entity" information related to a particular taxpayer. The ENMOD can confirm entity status and return filing requirements. A purchasing company performing due diligence on a prospective target may want to confirm that the target is a disregarded entity or whether it is a REIT, a TEFRA partnership, an S corporation, or in engaged in a bankruptcy proceeding. This information is available on the ENMOD. The ENMOD can...