IRS to Introduce New Tax Transcript
IRS Senior Stakeholder Liaison Marc Zine has asked us to share this important message with our Members.
Since the IRS joined in partnership with the states and tax industry in 2015, we’ve made great inroads in our effort to combat stolen identity refund fraud. Our numbers are going in the right direction.
Because it is much harder now to file a fraudulent tax return that can get past our safeguards, cybercriminals know they need more legitimate taxpayer information so they can better impersonate their victims. As we’ve evolved, so have the criminals who have stepped up their data theft efforts directed at tax professionals, employers and others.
To maintain our progress, we are evaluating our policies and procedures on an ongoing basis. One area that we identified as in need of change was with the individual tax transcript. In the coming months, the IRS will make changes regarding the format and distribution of the individual tax transcript to better protect taxpayer data.
Starting September 23, we will replace the current format of the individual tax transcript products and introduce a new tax transcript with redacted formatting. Identifying information, including names, addresses, SSNs and employer, will be partially redacted, but all money amounts will be visible.
As of September 23, the new transcript will display the following information:
- Last 4 digits of any SSN listed on the transcript: XXX-XX-1234
- Last 4 digits of any EIN listed on the transcript: XX-XXX1234
- Last 4 digits of any account or telephone number
- First 4 characters of the last name for any individual
- First 4 characters of a business name
- First 6 characters of the street address, including spaces
- All money amounts, including balance due, interest and penalties
Because the taxpayer’s SSN no longer can be used as a tracking number for third-party requesters, the IRS is creating a Customer File Number that third parties may use as an identifying number. The Customer File Number created by third party on Form 4506-T/T-EZ will populate on the transcript, allowing a redacted transcript to be matched to a taxpayer.
You can download a sample transcript
as well as a draft 4506-T
. For more information, visit the IRS’ About the New Tax Transcript: FAQs
Other planned changes involve how the individual tax transcript is distributed to the taxpayer or third parties. Data thefts result in increased risk to taxpayer data. Criminals have enough Personally Identifiable Information stolen from outside the tax system that they can impersonate taxpayers, as well as third parties such as tax preparers, to obtain more data.
At year’s end, when taxpayers or third parties call the IRS with a transcript request, the transcript will be mailed to the taxpayer’s address of record. The transcript will not be faxed on request to either the taxpayer or a third party. Additionally, after the 2019 filing season, we also will remove the option of third-party mailing from the Form 4506-T and 4506T-EZ.
Instead, transcripts will be mailed only to the taxpayer’s address of record. Third parties engaging in high volume transcript requests can contract with a participant or become a participant in the IRS Income Verification Express Services (IVES) program. Practitioners can register for e-Services to access client transcripts directly.
These changes are vital steps in our ongoing efforts to protect taxpayers from identity theft and to maintain progress against these stolen identity refund fraud crimes. Please let us know if we can provide additional information.
CSEA has protested the redacting of W-2 employer information from future transcripts. In a phone call with the IRS, President Cynthia Leachmoore, EA explained the burden this will place on tax practitioners, and asked the IRS to consider establishing a separate access for the loan industry, while retaining our ability to obtain necessary information. Look to CSEA for news on future developments.