Did it ever occur to you that your tax transcripts could be imitated and used to file fraudulent returns in your name? Instances of imposters impersonating taxpayers and authorized third parties have become an issue which has sensitized most of us to be constantly on the alert.
The IRS has been working on introducing new rules that will curb the menace of honest taxpayers getting cheated out by malicious individuals. In its latest move, the IRS has decided to end the faxing and third-party mailing of certain tax transcripts.
Read on to learn more about why this will be beneficial to you and essentially provide you with a more sense of security.
Why ban faxing and third-party mailing of tax transcripts?
In recent years, there has been a significant increase in the number of criminal cases which involve fraudulent individuals impersonating taxpayers or authorized third parties to gain access to confidential tax transcripts. By using the tax transcripts, imposters file a mirror image of legitimate tax returns to the IRS in order to get hold of the victim’s tax refunds. These fraudulent tax transcripts are almost undetectable because of the way they are drafted. The landmark decision ends the faxing and third-party mailing of certain tax transcripts to make the process stronger and secure.
No more faxing of tax transcripts starting 28th June
The faxing of individual and business tax transcripts to taxpayers and tax professionals will come to a halt 28th June onwards. But this then pops up the question as to how you are going to receive your tax data to file your returns on time? No need to fret. There are plenty of ways to ensure that you Don’t worry, read on to find out easy ways to receive your tax data anywhere and anytime.
- You can receive your tax data on the IRS website or the IRS2Go App to get access to your tax transcripts online with options to download and print it right then and there.
- You can also visit the IRS website or the IRS2Go App to get your transcripts mailed to you within 10 days of such application.
- Or you may also call at 800–908–9946 and request your tax transcript over mail by activating the ‘Get my Tax Transcript by Mail feature.’
- Or you could submit the Form 4506-T or 4506-T-EZ to get the tax transcript mailed to your address of record.
Find out how tax practitioners can gain access to individual and business tax transcripts for tax preparation and representation
1. You can request the IRS to mail the transcripts to the taxpayer’s address of record
2. You may also use the e-Service — Transcript delivery system online to obtain masked individual and business transcripts. Unmasked wage and income transcript for tax preparation can be received through the same method if the authorization is already there on the file.
3. Or you may call the IRS, fax the authorization to the IRS assistor and request them to place the document in your e-Service secure mailbox to receive individual and business transcripts of your clients. You can follow the same process to receive unmasked wage and income transcript for tax preparation.
No third-party mailing of tax transcripts starting 1st July
Starting 1st July, the usage of Form 4506, Form 4506-T and Form 4506-T EZ by third parties to request tax transcripts will come to a halt and the option for requesting a mail of tax transcripts by third parties will be removed, whereas taxpayers can continue to use these forms to obtain a copy of their tax returns and transcripts. Since tax transcript is an official IRS record, you as taxpayers can choose to provide your tax transcripts to requestors instead of authorized third parties to request such transcripts on their behalf. Also, the amendment in these forms will in no way affect the use of the IRS Data Retrieval Tool through the Free Application of Federal Student Aid (FAFSA) process.
A way out for third parties?
There is welcome news for third parties like lenders, colleges, universities etc. who so far used the Form 4506, Form 4506-T and Form 4506-T EZ to verify the taxpayer’s income for financial aid and non-tax purposes. You can still gain access to the required tax information by using the Income Verification Express Service (IVES) which has several hundred participants who with proper authorization can order transcripts. So, either contact the existing IVES participants or become a participant yourself to gain access to tax transcripts for income verification purposes.
How can third parties match tax transcripts?
This is a good question since the tax transcripts are now going to be partially masked to hide the taxpayer’s name and social security number. Then how do third parties identify the tax transcript? Through a Customer File Number such as a loan application number or student identification number assigned to individuals. This number will find a place in the new field — “Customer File Number space” — added to the transcripts which will help you in identifying such transcripts.
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