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For The Record: Ordering Taxpayer Transcripts At Tax Time

Feb. 6, 2020, 9:46 AM

When tax filing season is in full swing, many people assume that practitioners are busy focusing on preparing tax returns.

But tax practitioners are busy advocating for their clients throughout the year, even during tax filing season. And whether they are seeking information to resolve a matter or digging up lost records to prepare a tax return, tax professionals have a few ways to obtain information from the Internal Revenue Service (IRS).

Rather than work through the regular phone channels, tax practitioners have the option of requesting a transcript—a summary of return information—via the IRS Practitioner Priority Service® (PPS) line. The service is staffed by IRS customer service representatives specially trained to handle practitioners’ questions about accounts. You may contact PPS at 1.866.860.4259. For international accounts, dial 267.941.1000.

You’ll need to be able to verify your identity as a tax professional—and confirm that you have authorization from the taxpayer—before PPS representatives can help you. Typically, this involves confirming the information on a Form 2848 or other valid third-party approval already on file with the IRS. If you don’t have a form 2848 on file, you can fax one to PPS. You’ll also have to confirm your address and Centralized Authorization File (CAF) number and possibly provide your Social Security number and date of birth.

The IRS has stopped faxing most tax transcripts. Now, tax transcripts are typically mailed to a physical address or delivered electronically through e-services.

If you’re not ready to sit on hold with PPS, consider registering with e-Services. With e-Services, you can use the Transcript Delivery System (TDS) to receive most transcripts reasonably quickly. TDS is available for individual and business taxpayers, but you must have a Power of Attorney authorization on file through CAF before accessing the taxpayer’s account.

If you haven’t requested a tax transcript in a while, you’re in for a surprise: they have a new look. The IRS implemented a new format to better protect taxpayer information from identity theft. The new format partially masks the personally identifiable information of all taxpayers, including businesses, included on the tax return, but financial entries remain visible. For example, only the last four digits of social security numbers and employer identification numbers are shown on the transcript.

Because the taxpayer’s full SSN is no longer visible on the transcripts, the IRS has created an entry for a Customer File Number (CFN). This is an optional 10-digit number that can be created by third-parties like tax practitioners to match a transcript to a taxpayer.

This process allows high-volume users to match transcripts to taxpayers. The CFN field appears on the taxpayer’s transcript when entered on Form 4506-T, Request for Transcript of Tax Return, and Form 4506T-EZ, Short Form Request for Individual Tax Return Transcript.

Some tax professionals can request a taxpayer’s unmasked Wage and Income Transcript. The unmasked transcript will fully display employers’ names, addresses, and EINs needed for tax preparation and electronic filing.

If you have authorization, you can call PPS to request an unmasked transcript to be sent to the client’s mailing address of record. Tax professionals with e-Services accounts, approved authorization, and access to TDS can get the information sooner: it will be sent to the tax professional’s e-Services Secure Object Repository (SOR), a secure electronic mailbox.

The IRS website lists several different kinds of transcripts available, depending on what you need:

  • A tax return transcript shows most tax return line items, including the taxpayer’s adjusted gross income (AGI) from an originally-filed form 1040, along with any forms and schedules. This type of transcript doesn’t include any changes made after the original return has been filed.
  • A tax account transcript includes basic data about a taxpayer’s account, including their filing status and taxable income. It does reflect changes made after an original return was filed.
  • A record of account transcript is a combination of the tax return and tax account transcripts and shows most activity posted to the account. This is helpful if you need to view a complete report, including balances, penalties, and interest, as well as payments and credits.
  • A wage and income transcript shows data from information returns filed with the IRS, including Forms W-2, 1099, 1098, and 5498. This is helpful if the taxpayer is missing data needed to file tax returns or to verify that information recorded on substitute returns is correct.
  • A verification of non-filing letter offers proof that the IRS has no record of a filed Form 1040, 1040A, or 1040EZ for a particular year, though it won’t confirm whether a taxpayer was actually required to file a return for that year.

Transcripts are not the same as copies of original tax returns. If you need a copy of the original tax return, the taxpayer must complete Form 4506, along with $50 for each return requested. The taxpayer can also designate a third party, including a tax professional, to receive the tax return.

Don’t get caught off-guard. As tax professionals, we hope that taxpayers maintain good tax records, but that’s not always the case. If you need access to taxpayer records, there are options available if you plan ahead.

This is a weekly column from Kelly Phillips Erb, the TaxGirl. Erb offers commentary on the latest in tax news, tax law, and tax policy. Look for Erb’s column every week from Bloomberg Tax and follow her on Twitter at @taxgirl.

To contact the reporter on this story: Kelly Phillips Erb at kelly.erb@taxgirl.com

To contact the editors responsible for this story: Meg Shreve at mshreve@bloombergtax.com; Joe Stanley-Smith at jstanleysmith@bloombergtax.com