Kathy Ploch, CPA-Houston
Effective June 28, the IRS ended its faxing service for both individual and business tax transcripts. The third-party mailing options from the Form 4506, Request for Copy of Tax Return, also ended.
Unmasked and easily available transcripts presented risks to taxpayers. Thieves were stealing identities from taxpayers and tax professionals’ offices, then forging taxpayers’ signatures on Form 4506 to order transcripts. These are some of the reasons why the IRS began redacting the information on the taxpayer transcripts.
After many comments from the practitioner community, the IRS worked with various professional associations to devise a solution that would safeguard confidential taxpayer data and allow access to the information for tax return preparation.
As a reminder, attorneys, CPAs and enrolled agents (i.e., Circular 230 practitioners) can create an e-Services account and obtain access to the Transcript Delivery System (TDS) and the e-Services secure mailbox. Electronic Return Originators (EROs) also have access to TDS.
If you have not registered for e-Services (www.irs.gov/e-services), this is definitely the time to apply.
If you are an e-Services user, this is an excellent time to update your existing e-File data to ensure that all your personnel have access to the e-Services mailbox and TDS. Although firm employees may have received their IRS letter with the access information, they still must be included on your firm’s list to be fully authenticated.
In 2017, the IRS updated its process for creating an e-Services account. If you registered prior to 2017, but have not been using e-Services, you may need to re-register. The IRS does not inactivate an old e-Services account.
Below are the various types of transcripts that you can receive electronically:
Account transcripts: Summary of basic data, including marital status, type of return filed, adjusted gross income and taxable income. It also includes any adjustments that have been made after the return was filed.
Tax return transcripts: Summary of the original tax return, but does not reflect any changes made after the return was filed.
Record of account transcripts: Combines the account transcript and tax return transcript. The IRS suggests this transcript for any 1040X information.
Wages and income (W & I) transcripts: Summary of data from information returns, such as Forms W-2, 1099, 1098, etc. The IRS uploads this information on a weekly basis.
Verification of non-filing letters: Provides proof of no return on file.
With an e-Services account, you have several options to obtain tax transcripts for tax return preparation or representation:
- Use TDS online to obtain individual or business transcripts.
- Call the IRS to obtain either an individual or business transcript. If your Form 2848 is not on file, you can still fax it to the IRS and receive a transcript in your e-Services secure mailbox.
- Note that the W & I transcript is the only unmasked transcript that will be available to tax practitioners.
To receive masked transcripts, go to the IRS website under “Get Transcript Online” or “Request by Mail,” or call an automated phone number to order the masked transcripts by mail.
To receive an unmasked W & I transcript, call the IRS, correctly answer a series of security questions and the IRS will mail it to you.
The IRS recently revised Form 4506-T and 4506T-EZ to eliminate the third-party mailing option. High-volume users, such as mortgage lenders, can become a participant or contract with an existing participant in the Income Verification Express Service (IVES) program. (www.irs.gov/individuals/international-taxpayers/income-verification-express-service). Use Form 13803, Application to Participate, in IVES. The requester assigns a 10-digit customer file number to identify the taxpayer rather than the Social Security number. Third-party software providers are receiving masked transcripts from the IRS; contact your provider directly if you have any questions on how to receive the unmasked transcripts.
Students’ verification of non-filing letters for FAFSA are mailed to the taxpayers’ address of record (www.irs.gov/individuals/irs-offers-help-to-students-families-to-get-tax-information-for-student-financial-aid-applications). Copies of tax returns from Form 4506-T are also mailed to the taxpayers’ address of record.
Listed below are various IRS resources:
- “About the New Tax Transcript” at www.irs.gov/eServices
- “Secure Access: How to Register for Certain Online Self-Help Tools” at www.irs.gov/SecureAccess
- Publication 4557, Safeguarding Taxpayer Data, on securing tax information at https://www.irs.gov/pub/irs-pdf/p4557.pdf
- IRS E-Help Desk 1-866-255-0654
- IRS Secure Access Registration 1-888-841-4648
- IRS Fact Sheet 2018-20 at www.irs.gov/newsroom/steps-for-tax-professionals-to-obtain-wage-and-income-transcripts-needed-for-tax-preparation