The IRS has announced a new format for individual tax transcript that will better protect taxpayer data. This new will be rolled out on September 23, 2018.
The main goal is to make greater strides to fight against stolen identity refund fraud. Over the last few years, criminals need more taxpayer details to better impersonate their victims, making the tax return transcript the most sought-after document.
The new format redacts personally identifiable information but keeps financial entries visible to tax professionals and third-parties, such as lenders and colleges. The following information will be provided on the new transcript:
- Last four digits of any Social Security Number listed on the transcript: XXX-XX-1234
- Last four digits of any Employer Identification Number listed on the transcript: XX-XXX-1234
- Last four digits of any account or telephone number
- First four characters of the last name for any individual
- First four characters of a business name
- First six characters of the street address, including spaces
- All money amounts, including the balance due, interest and penalties
Because the taxpayer’s Social Security Number 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 a third party on Form 4506-T/T-EZ will populate on the transcript, allowing a redacted transcript to be matched to a taxpayer.
Other planned changes are how the individual tax transcripts are to be distributed to taxpayers or third parties. The IRS will halt fax delivery of these to representatives via phone as soon as December 2018. Also, the IRS will eliminate mailing of transcripts to taxpayers on April 15, 2019.
If you have further questions or would like to discuss, please contact your Henry+Horne tax advisor.
By Danette Holguin, EA