Return Information: Key Insights into Its Legal Meaning and Implications
Definition & Meaning
The term return information refers to any data related to a taxpayer's tax return. This includes personal details about the taxpayer, such as their identity, income sources, amounts earned, deductions, credits, assets, liabilities, and tax payments. It also encompasses information about any audits or investigations of the taxpayer's return, as well as any formal written determinations made by tax authorities that are not publicly available. Additionally, it covers advance pricing agreements between taxpayers and the Secretary of the Treasury, along with related background information. However, return information does not include data that cannot be linked to a specific taxpayer.
Legal Use & context
Return information is primarily used in tax law and is crucial for ensuring taxpayer privacy and confidentiality. It plays a significant role in various legal contexts, including:
- Tax audits and investigations
- Legal disputes involving tax liabilities
- Negotiations for advance pricing agreements
Taxpayers can manage their return information through forms and templates available from resources like US Legal Forms, which can help simplify the process of filing taxes and responding to audits.
Real-world examples
Here are a couple of examples of abatement:
Example 1: A taxpayer receives a notice from the IRS regarding an audit of their return. The IRS uses return information to assess the taxpayer's income and deductions.
Example 2: A business enters into an advance pricing agreement with the IRS to determine the appropriate transfer pricing for its international transactions (hypothetical example).
Relevant laws & statutes
The primary statute governing return information is:
- 26 U.S.C. § 6103 - This section outlines the confidentiality of tax return information and the circumstances under which it can be disclosed.