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Additional steps to protect taxpayer data; plans to end faxing & third-party mailings of certain tax transcripts

June 5, 2019

 

As part of ongoing efforts to protect citizens from identity thieves, the Internal Revenue Service announced it will stop the tax transcript faxing service in June and will amend the Form 4506 series to end third-party mailing of tax returns and transcripts in July.

 

Tax transcripts are summaries of tax return information. These transcripts have become very susceptible as criminals impersonate individual taxpayers or authorized third parties. Identity thieves use tax transcripts to file fraudulent returns for refunds that are hard to detect, because they resemble a legitimate tax return.

 

By stopping the faxing and third-party service this summer, the IRS is taking two more steps to protect taxpayer data. Last September, the IRS began to cover personally identifiable information for every individual and entity listed on the transcript.  During that time, the IRS announced it intended to stop its faxing and third-party mailing service, and has since worked with tax professionals to assure they have what they need for tax preparation and representation.

 

Faxing service ends June 28

 

Starting June 28, 2019, the IRS will cease faxing tax transcripts to both taxpayers and third parties, including tax professionals. 

 

You the taxpayer have several options to obtain a tax transcript.  You may:

  • Use IRS.gov or the IRS2Go app to access Get Transcript Online; after verifying your identity, you may immediately download or print your transcript, or

  • Use IRS.gov or the IRS2Go app to access Get Transcript by Mail; transcript will usually be delivered within 10 days to the address on record, or

  • Call 800-908-9946 for an automated Get Transcript by Mail feature, or

  • Submit Form 4506-T or 4506T-EZ to have a transcript mailed to the address of record.

At LR Tax & Accounting Services, you also have several options to obtain tax transcripts necessary for tax preparation or representation as follows:

  • Request that the IRS mail a transcript to the taxpayer’s address of record, or

  • Use e-Services’ Transcript Delivery System online to obtain masked individual transcripts and business transcripts, or

  • Obtain a masked individual transcript or a business transcript by calling the IRS, faxing authorization to the IRS assistor and the IRS assistor will place the document in the tax practitioner’s e-Services secure mailbox.

  • When needed for tax preparation purposes, tax practitioners may:

    • Obtain an unmasked wage and income transcript by calling the IRS, faxing authorization to the IRS assistor and the IRS assistor will place the document in the tax practitioner’s e-Services secure mailbox, or

    • Obtain an unmasked wage and income transcript if authorization is already on file by using e-Service’s Transcript Delivery System.

Certain third-party mailings stop July 1

 

Effective July 1, 2019, the IRS will no longer provide transcripts requested on Form 4506, Form 4506-T and Form 4506T-EZ to third parties, and the forms will be amended to remove the option for mailing to a third-party. These forms are often used by lenders and others to verify income for non-tax purposes. Among the largest users are colleges and universities verifying income for financial aid purposes. Tax professionals also are large volume users.

 

If needed, you may continue to use these forms to obtain a copy of their tax return or obtain a copy of their tax transcripts. This change will NOT affect use of the IRS Data Retrieval Tool through the Free

Application for Federal Student Aid (FAFSA) process.

 

Third parties who use these forms for income verification have other alternatives. The IRS offers an Income Verification Express Service (IVES) which has several hundred participants, who, with proper authorization, order transcripts. Lenders or higher education institutions can either contract with existing IVES participants or become IVES participants themselves. The tax transcript is an official IRS record. Taxpayers may choose to provide transcripts to requestors instead of authorizing the third party to request these transcripts from the IRS on their behalf.

 

Please remember that LR Tax & Accounting Services, Inc. is always here to help with any questions and concerns. We offer tax planning, tax resolution, tax returns for individuals and business, accounting, payroll and bookkeeping. Please contact us today to get a quote or ask a question!

 

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