Does the IRS match real estate transactions?
Real estate transactions are one of the latest additions to the matching program. Brokers, escrow firms and others who handle the sale of real property must report the gross sales proceeds to the IRS on Form 1099-S. Does the Government compare tan returns of different taxpayers to match data? In some situations, to create a matching program, the IRS uses specific data on income tax returns. For example, a taxpayer who pays and deducts alimony must include the last name and social security number of the ex-spouse on the 1040. The IRS matches this information with the alimony income reported by the ax-spouse. A similar matching program has recently been implemented to match social security numbers for dependents. The IRS is trying to make sure that dependents are not claimed by more than one taxpayer. What happens when IRS data does not match a taxpayer’s return? If IRS finds a discrepancy between the amounts taxpayers report on their tax returns and the amounts in the IRS computer, the
