Posted by Fred Lake

Some Important Changes Were Made to Tax Transcript Availability

Some Important Changes Were Made to Tax Transcript Availability

In order to protect taxpayers, tax professionals, and third parties against identity theft, the Internal Revenue Service said Tuesday that on June 28 it will no longer be faxing tax transcripts. The IRS will no longer be mailing tax transcripts to third parties as well. Individuals and businesses can expect to be covered by this new policy.

Individual taxpayers will be able to obtain their tax transcripts, which are summaries of tax return information, in different ways once this change goes in effect. They are the following:

  • Visiting or using the IRS2Go app to access Get Transcript Online - It’s required that taxpayers first verify their identities although they may also immediately download or print their transcript.
  • Visiting or use the IRS2Go app to access Get Transcript by Mail - The recorded addresses will receive the transcript to be delivered within 10 days.
  • For an automated Get Transcript by Mail feature, taxpayers may call 800-908-9946; or
  • Taxpayers may also submit Form 4506-T, Request for Transcript of Tax Return, or 4506T-EZ, Short Form Request for Individual Tax Return Transcript, to have a transcript mailed to the taxpayers' recorded address.

For tax preparation or representation purposes, tax practitioners have several options to obtain taxpayers’ transcripts going forward. This includes having them mailed to the taxpayers’ addresses and obtaining masked transcripts. The e-Services Transcript Delivery System hides personally identifiable information in these masked transcripts.

The IRS is also taking an additional step to stop identity theft beginning July 1 by not providing an option to have transcripts mailed to a third party for Forms 4506, Request for Copy of Tax Return. Often times, these requests are done by lenders and others to allow them to do verification of income for nontax purposes. By using the IRS’s Income Verification Express Service (IVES), those requests can be met going forward. After this change, the currently available tax return information through the IRS Data Retrieval Tool through the Free Application for Federal Student (FAFSA) will continue to be available.

The IRS wants to help third parties match transcripts to individual taxpayers so they set up a program for that to happen since transcripts are masked by obscuring names and Social Security numbers. A Customer File Number is being assigned as permitted by IRS to third parties such as loan application number of a student identification number. To help match it to the client or student, the number populate on the transcript.

IRS Frequently Asked Questions 

The IRS provides answers to some of the most frequently asked questions related to getting a transcript. Here are some of them:

1. How to tell if it’s your information on the transcript? - Identifying the person associated with the transcript can be done by anyone with a need to know. The last four digits of the SSN will be shown in the transcript while an individual name will show the first four letters.

2. Can banks accept the new transcript to verify income? - The new transcript has been socialized with all the IRS’ stakeholders. That includes the banking industry requiring income verification for non-tax related purposes. The new transcript to verify your income should be accepted by your bank.

3. Are students seeking income verification to qualify for college aid affected by this change? - You are not affected if you are a student using the IRS Data Retrieval Tool through the Free Application for Federal Student Aid (FAFSA). The normal steps for student aid can be followed.

4. What can a tax practitioner do if his/her client lacks wage documents? - If an unmasked Wage and Income Transcript is needed by a tax practitioner, they may call the Practitioner Priority Service line. Authorization can be faxed by Practitioners with active e-Services accounts to the IRS assistor and may request for an unmasked Wage and Income Transcript to the Secure Object Repository mailbox. The unmasked Wage and Income Transcripts from the Transcript Delivery system may also be accessed by tax practitioners with e-Services accounts and approved authorization. An unmasked Wage and Income Transcript may be requested by tax professionals to be sent to the client’s address of record.

If you have any more clarifications or need additional information, you may visit the IRS website or consult a tax professional to help obtain your tax transcripts.

Fred Lake
Contact Member