IRS Requesting Bank Records, Can I Redact?

[lothbrook]

The IRS has requested bank statements, I assume to establish if I omitted income for that particular tax year.

I was told by a relative that I have the legal right to redact transactions (non-deposit related) that are irrelevant or may cause unnecessary harm. He apparently sent bank statements with redacted lines and whoever was auditing never mentioned anything.

For example, I want to redact a few transactions related to medical-related payments in connection to a disease I have, which even close friends don't know about.

And I want to redact a transaction or two where I paid my mother's credit card bill, which has nothing to do with nothing.

I assume the main interest in reviewing those records are to tally up my deposits. I see little relevancy in outgoing transactions/purchases of a personal nature.

 

[justalayman]

You can redact anything you wish to redact. If the IRS has issue with it, I’m sure they will let you know.

Since you are assuming what they are looking for, it’s all a guessing game on your part anyway.

 

[Taxing Matters]

The IRS has requested bank statements, I assume to establish if I omitted income for that particular tax year.

There are several reasons the IRS might ask for bank records. If you are being audited by a tax auditor at a local office, contact the auditor ask what the record request is for.

I was told by a relative that I have the legal right to redact transactions (non-deposit related) that are irrelevant or may cause unnecessary harm. He apparently sent bank statements with redacted lines and whoever was auditing never mentioned anything.

You can do that, but if the IRS thinks that you are hiding something that relates to the accuracy of your return, that could be a problem. The IRS might then ask for unredacted copies or may simply summon the records from the bank directly. Or, perhaps, simply make the adjustment to your return if the IRS is not satisfied with the records provided. If this is a personal bank account and the records are not needed to support deductions/credits you claimed then it's not likely to be a big deal to redact the transaction description, but you should not redact the amounts.

 

[adjusterjack]

I was told by a relative

Two red flags there.

1 - "I was told" is the most dangerous phrase in the English language.

2 - "by a relative." Kind of like having your auto mechanic do your brain surgery.

 

[lothbrook]

There are several reasons the IRS might ask for bank records. If you are being audited by a tax auditor at a local office, contact the auditor ask what the record request is for.



You can do that, but if the IRS thinks that you are hiding something that relates to the accuracy of your return, that could be a problem. The IRS might then ask for unredacted copies or may simply summon the records from the bank directly. Or, perhaps, simply make the adjustment to your return if the IRS is not satisfied with the records provided. If this is a personal bank account and the records are not needed to support deductions/credits you claimed then it's not likely to be a big deal to redact the transaction description, but you should not redact the amounts.

The auditor asked for any bank records where I receive money. That's why I assume they are interested in deposits as opposed to personal items or outgoing amounts.

 

[LdiJ]

The auditor asked for any bank records where I receive money. That's why I assume they are interested in deposits as opposed to personal items or outgoing amounts.

I would still follow Taxing Matters advice and only redact descriptions rather than amounts.

 

[lothbrook]

I would still follow Taxing Matters advice and only redact descriptions rather than amounts.

I should have been more clear in my opening post. I don't want to redact the amounts, only the descriptions of what was purchased.

 

[xylene]

The IRS does not care about your disease.

 

[LdiJ]

I should have been more clear in my opening post. I don't want to redact the amounts, only the descriptions of what was purchased.

That is going to be fine as long as you do not have to account for Schedule C, E or F expenses.