May 25, 2008

Q & A: IRS And the Income Matching System

QUESTION: I, unfortunately, had worked for a person who is dishonest and is capable of committing fraud. I am somewhat worried that this person might have used my social security # and/or tax ID #, and 1099 forms might have been generated and filed about 5 years ago. You wrote that "the IRS will match your tax return with all of the information statements they have received (the IRS calls it their "IRP" file for "Information Returns Processing"). The IRS usually takes about 12-18 months to accumulate this data, scrub it for items they wish to match against identifying numbers, and send out discrepancy letters (referred to as "CP 2000" letters) via its "Automated Underreporter." Since the year I am concerned about is more than 5 years ago and I did not receive a letter from the IRS which I should have received within 12-18 months if a fraud did not occur, am I correct in thinking that there is nothing to worry about?

ANSWER: Thanks for the question. It appears that you are OK as the matching is done and scrubbed before 2 years after you file. The IRS only maintains the IRP data for the six past filed years (i.e. currently 2002-2007). The IRS takes the "IRP" document off line around this time each year (i.e. they just took the 2001 off-line).
The only way to be sure is to pull the IRS IRP data under your SSN for that year and compare it to your tax return. I can assist you if you like with that "tax match".
Otherwise, you appear to be OK given that it was 5 years ago.

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