The Internal Revenue Service (IRS) is undoubtedly one of the most common and probably feared agencies in the United States. They are charged with ensuring that individuals pay their respective taxes, among a host of other duties. Due to the IRS scope of operation, you would assume that they have access to much of your financial information, including personal details. In light of that, you may want to know if this agency can actually see your bank account.
The IRS can see your bank account if they want to. However, they often prefer not to snoop around on your bank account unless you are being audited or owe taxes. As a federal government agency, the IRS has access to all information regarding your financial account.
The IRS is like an omniscient agency, especially when it comes to your financial records. Hardly can you hide from the agency. As one of the most important government agencies, the IRS has access to your financial accounts and records. If you owe tax, you trust them to find out. In fact, unlike a typical creditor, the IRS doesn’t need a court’s writ of garnishment to garnish your account if you owe taxes. The authority this agency commands might make you ask questions like: can they see how much I have in my account? You’ll have to read on to get a detailed answer.
Can the IRS See Your Bank Account?
Many of us wouldn’t like it if our spouse, friend, or family member could see how much we have in our bank account. Such information is not to be shared with anyone, which is why we often password our mobile banking apps and keep information regarding our bank account balance to ourselves.
But, sometimes, this information you hold so dear is often made available to someone, or an agency, to be specific. If you understand how this agency works and the information they have at their disposal, the chances are that it would have crossed your mind. However, you may need certain proof to validate your assumption.
Is it really true? Can the IRS see my bank account? Having such thoughts cross your mind could make you feel uneasy or vulnerable. However, you shouldn’t be, especially if you don’t intend on avoiding taxes or carrying out any illegal financial activity. You trust the IRS not to steal your money or reveal the content of your bank account to someone who might. Thus, there is nothing to be scared of if indeed this agency is allowed to take a sneak peek into your bank account.
Before we progress, let’s look at who the IRS is. Maybe, a little insight into this agency will help you understand why they do what they do.
Who is the IRS?
The Internal Revenue Service (IRS) is the federal agency charged with collecting tax revenue for the federal government. It is that agency responsible for those deductions in your pay, including those quarterly estimated tax payments you make if you are self-employed. The Internal Revenue Service has stringent rules you must adhere to and, if you decide not to, you can face some harsh punishments.
Some of the duties of the IRS include:
- Obtaining and processing tax returns that people and businesses file
- Ensuring that you pay any taxes that are due
- Issuing refunds if you overpaid taxes during the year
- Supervising certain retirement plans
- Carrying out criminal investigations
- Guiding you through all these problems in a friendly, helpful way
Who Owns the IRS?
The internal revenue service is a bureau of the United States Department of Treasury and deems itself a “tax administrator” that works under the direction of the Secretary of the Treasury. So rather than be “owned” by the Treasury, the internal revenue service more so “works” for the Treasury.
Having understood who the IRS is, it is high time I revealed if this agency can indeed see your bank account.
The IRS probably already knows about many of your financial accounts. In addition, they can acquire information on how much you have in each account. However, in reality, this agency seldom digs deeper into your bank and financial accounts unless, of course, you are being audited or they are recovering taxes from you.
- The internal revenue service has much information on taxpayers. A chunk of this information comes from these three sources:
- Your filed tax returns
- Information statements about you (Form W-2, Form 1099, etc.) under your Social Security Number
- Data from third parties, such as the Social Security Administration
How to Determine What the IRS Has About Your Financial Accounts?
To see the IRS info regarding your financial accounts, order your wage and income transcript for the year from the Internal Revenue Service. In late July, this transcript will display most of your information statements reported to the IRS.
In some cases, the Internal Revenue Service will want to know about exact transactions in your bank account or regarding other accounts that aren’t displayed on your tax returns or information statements. Most of the time, these inquiries would come from certain IRS employees during an audit (revenue agent) or a black tax issue (revenue officer).
The first thing the IRS would do is ask for these records. If you fail to provide them by the IRS deadline, they can summon the records directly from your bank or financial institution.
How Does the IRS Know Your Account Number?
The IRS has access to a lot of taxpayer information. This information ranges from your financial account, information regarding your income, etc. As a taxpayer, it makes sense to have an insight into the details the IRS have about you, not because you wish to avoid tax, but for knowledge purpose. Aside from your financial account and income, the IRS can obtain your account number. But how do they do that?
The Internal Revenue Service has several ways to locate your bank account information, including your account number. Since you need a Social Security number to open a bank account, this agency can track bank accounts linked with your name and number.
Provided you aren’t evading your tax obligations, I see no reason why you should be scared that the IRS knows your account number or information regarding your finances.