How can the IRS know everything about you on your income tax?

The IRS has a series of information about Financial movements of taxpayers, which can be observed by those using a pre-filled income tax return. In this model, citizens only need to verify data such as income, deductions, assets, debts and even medical services.

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This large amount of details provided by the agency raises the following question: How is information collected to detect cases of tax evasion? According to attorney Daniela Poli Flavianos, partner at Poli Advogados, the IRS audits financial and tax data from various sources.

He added, “This crossing aims to ensure the accuracy of the announced information and combat tax evasion.”

Sources of revenue information

Today, there are seven main sources of information used to verify a taxpayer's financial transactions, each of which collects specific data. See what they are:

• Personal Income Tax Declaration (DIRPF): Financial statements for the previous year are among the sources.
• Declaration of Information on Real Estate Activities (DIMOB): A document containing data on real estate transactions.
• Declaration of Credit Card Transactions (DECRED): Refers to financial transactions made using credit cards.
• Medical and Health Services Declaration (DMED): Details of medical expenses through health services payments.
• E-Social and CAGED: databases on jobs, salaries and worker movements.
• Electronic Invoice (NFe) and Electronic Consumer Invoice (NFCe): Proof of purchase and sale of goods or services.
• E-Financeira: Information from banks, leasing companies, supplementary annuities, securities brokers and distributors, insurance companies, financial institutions and other payment institutions.

The Federal Revenue Service can also use data from other agencies and entities to conduct a comprehensive audit, whether national or international, and expand the scope of its supervisory authority.

“With the economic activities of taxpayers being monitored in almost real time, transparency and accuracy when declaring tax information is not only a legal obligation, but also the only way to ensure compliance and avoid inspection problems, reflecting the reality that, in today’s world, procedures are… Every citizen is subject to constant financial audit.

*With information from the Financial Intelligence Portal.