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What if a divorce complicates your efforts to find out about inherited money and back taxes? This week, that "Ask the Experts" question gets answered by Gregory Burke, a Sacramento CPA and former IRS auditor.
My friend's inheritance was managed by her husband. After their falling-out, he refused to divulge where the assets were kept. It is unclear if the courts will force him to disclose while their divorce is underway. When she tried to get old tax returns to see where her inheritance income came from, the IRS directed her to collections because her husband had not paid their taxes correctly and they owed back taxes. The only way she can pay the back taxes is if she regains control of her money. How does she find the right IRS person so she can look at her old tax returns and locate her money? I hired a CPA for her, and he hit the same wall.
There are several ways to get the information she needs.
To request copies of prior tax returns, use IRS Form 4506.
There is a $57 fee for each return requested. It may take up to 60 days to obtain copies of the returns after the form is filed.
You can obtain Form 4506 online from the IRS website at www.irs.gov (click on "Forms & Publications"). You can also visit the local IRS office (4330 Watt Ave. in Sacramento) to get the form in person.
If you want information on the amount of tax due for prior years, you can obtain a transcript of tax returns. (A transcript is a summary and shows most line items, without all the detail from the return itself.)
To request a transcript, call the IRS at (800) 908-9946, or use the IRS website and click on "Order a Transcript." Once the IRS receives your request, the transcript should be sent in five to 10 days.
There are separate instructions for mailing your request, depending on whether you live in California or another state, and whether you need another type of tax return, such as for an estate or trust.
If the returns were done by a paid income-tax preparer, you should be able to obtain copies from the preparer.
Since the statute of limitations for assessment of additional tax is three years for the IRS and four years for California, many professional tax preparers keep returns at least five years.
Also, a good starting place for information about your friend's inherited assets would be the executor who handled the original inheritance.
Finally, she may want to get her family-law attorney involved. An attorney may be able to more quickly force the husband to divulge information about the inherited assets and the tax returns.
Compiled by Claudia Buck