An IRS transcript is the official record of past tax returns and shows most of the line items from your Form 1040 as filed, along with any associated forms and schedule entries.
We like to think that transcript monitoring is akin to monitoring your credit report. We will monitor your transcripts on a regular basis for changes and alert you if action is required. This affords tax issues to being fixed before they become problems.
The Inflation Recovery Act, as initially passed, increased the IRS budget by approximately $80 billion to be spent over 10 years. The money is allocated into four main categories with enforcement to receive a 69% increase to $45.64 billion. This signaled the case for strengthening enforcement of existing taxes rather than creating new ones as a way to increase revenue. And, in the wake of the pandemic, the IRS is finally making significant progress on back logged returns. These two events clearly signal that the IRS will be more proactive in the coming years.
According to the IRS, transcript monitoring will not trigger your chances of an audit.