Q: What is the purpose of filing Income Tax Returns every Year?
A: Tax returns forms are documents created by the Federal and State (local) taxing authorities so that taxpayers can submit how much money they made during the prior year versus how much money they paid in taxes. Basically the Government wants to know have you met your legal obligations to pay the government.
Q: Who else uses these tax forms?
A: The tax forms belong to the Federal, State and Local taxing authorities. Other organizations that you do business with may ask you to furnish a copy to them as part of their policy, such as financial institutions, adoption agencies, foreign countries, health insurance providers, etc...basically anyone can request your tax returns from you, but its up to you to provide it to them.
Q: Can I refuse to give a copy of my tax return to any other organization aside from the taxing authorities?
A: Yes, but you may not get what you are asking for from that organization. It is important to understand that the tax returns that are filed with the taxing authority are yours. Without your say so no other organization will have access to your tax return.
Also there may be a time where your lender may ask for a letter from your Accountant regarding the tax return they filed. These are called comfort letters, the lenders use these letters and add them to your loan and later if you are late or default on your loan they will try to sue your Accountant. For this reason and due to AICPA Professional Code of Conduct Standards Spencer Accounting Group, LLC, does not respond to any request from banks, mortgage brokers or others for verification of any information reported on these tax returns.
We're Here to Help
Get advice from our experienced network of financial managers.
Spencer Accounting Group, LLC does not provide investment, tax, legal, or retirement advice or recommendations in these blogs. The information presented here is not specific to any individual's personal circumstances.
Keana Spencer is an Accountant, Entrepreneur, and Educator to her clients, with a strong passion. Keana has over 10 years of experience and through her practice, she is a source of knowledge and strategies to her clients.