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New Tax Transcript Format and Procedures

 

The IRS is hoping a redacted tax transcript and a new customer file number will prevent fraudsters from gaining access to valuable taxpayer data.

This new transcript partially masks the personal identifiable information listed on the federal tax return. For example, only the last four digits of the Social Security number (SSN) or the employer identification number (EIN) are shown. Also, you only see the first four letters of the taxpayer’s name and first six characters of the street address. There is no city or state listed. All money amounts are still visible. This new format is for individual transcripts only.

Since the taxpayer’s SSN is redacted, third parties can create an optional 10-digit identifier—a customer file number—to match a transcript to a taxpayer. Form 4506-T, Request for Transcript, has a new Line 5b to accommodate this new number. Tax professionals authorized to access transcripts through the e-Services Transcript Delivery System (TDS) can enter the 10-digit customer file number to automatically populate on the transcript. Beginning January 2019, taxpayers may also assign a 10-digit number to their own transcript through “Get Transcript Online” or “Get Transcript by Mail.”

Sometime in January 2019, the IRS plans to stop faxing transcripts to taxpayers and third parties. This applies to both individual and business taxpayers. These transcripts will be mailed to the taxpayer’s address on record, but not to the practitioners. Practitioners can obtain available transcripts through the TDS. The IRS plans to stop all mailing of transcripts to third parties listed on Line 5a of Forms 4506-T and 4506T-EZ sometime in May 2019.

A taxpayer or Power of Attorney can request an unredacted transcript at a Taxpayer Assistance Office. However, it must be mailed to the taxpayer’s address on record.

Unfortunately, the new procedures may make it more cumbersome for tax professionals to serve their clients. TSCPA’s Federal Tax Policy Committee is reviewing the changes’ impact on daily tax administration.

https://www.irs.gov/newsroom/irs-to-introduce-new-tax-transcript-to-better-protect-taxpayer-data

https://www.irs.gov/newsroom/coming-soon-a-new-tax-transcript-to-better-protect-taxpayer-data

https://www.irs.gov/individuals/about-the-new-tax-transcript-faqs

https://www.irs.gov/pub/irs-utl/New_Tax_Return_Transcript.pdf

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