How To Leverage IRS Data To Determine Business and Financial Stability

IRS Data

How To Leverage IRS Data To Determine Business and Financial Stability

If you’re a financial institution thinking about approving a loan for a business, you need to do your due diligence before pulling the proverbial trigger. Thanks to modern-day technology and internet access, doing so is relatively easy. But you have to know where to look. The Internal Revenue Service (IRS) is a great place to start. The government agency has an enormous database that makes it easy to determine the financial stability and legitimacy of just about any business.

Leveraging IRS data to help determine business and financial stability will require being granted access to critical information. Often, this requires hiring a third-party service to work with the IRS on your behalf. A third-party service can have a 8821 form with the IRS, which allows the government agency to discuss tax matters with them. Once filed, the third-party service can obtain information from the IRS by submitting forms, receiving transcripts, and other means to help them determine if a business is legitimate and financially stable.

Employer Identification Numbers

These days, you never want to take the word of any business at face value when it comes to them being who and what they say they are, and this is why the IRS created Employer Identification Numbers (EINs). Also known as a Federal Employer Identification Number, an EIN is a unique nine-digit number that identifies a business for tax purposes. Third-party service companies can easily verify a business’ EIN via the IRS Taxpayer Identification Number (TIN) Matching system.

4506-C and Transcripts

Before approving a business loan, you should carefully review the financial standing of that business. And that is where the 4506-C form comes into the picture. Private Eyes will help you complete and submit the 4506-C form. After completing the form, we will receive the transcripts containing the income, assets, and expenses associated with a business. That information can provide valuable insights relative to the business’ creditworthiness and potential for future growth.

In summary, businesses that seem trustworthy might not always be. Unfortunately, there are always a few bad apples that exaggerate or flat-out lie about their revenue, assets, and more. Hiring a trusted third-party service like Private Eyes will help you discern fact from fiction as it relates to the legitimacy of a business and its financial standing by leveraging their IRS data.

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