new irs tax transcript

Today the IRS announced a new format for individual tax transcripts that will redact personally identifiable information from the Form 1040 series. This new transcript replaces the previous format and will be the default format available via Get Transcript Online, Get Transcript by Mail or the Transcript Delivery System for tax professionals as of September 23.

Financial entries will remain visible, which will give taxpayers and third-parties the data they need for tax preparation or income verification. Below you will find some of the highlights:

  1. The IRS also has created a new Customer File Number that lenders, colleges and other third parties that order transcripts for non-tax purposes can use as an identifying number instead of the taxpayer’s SSN.

  2. The IRS also will post an updated Form 4506-T and Form 4506T-EZ, Request for Transcript of Tax Return, that will have a new Line 5b for a 10-digit Customer File Number. Legitimate third parties with a need for income verification or tax data often request taxpayers complete a Form 4506-T.

  3. Third parties or taxpayers can create any 10-digit number, except for the taxpayer’s SSN, for use as an identifier. The Customer File Number listed on the 4506-T automatically will be posted and visible on the requested tax transcript, allowing the third party to match the document to the taxpayer.

  4. There is no change in the process for students seeking income verification through Free Application for Federal Student Aid (FAFSA) or disaster victims seeking FEMA assistance. Nor will business tax transcripts change

  5. The following information will be provided on the new transcript:

  • Last 4 digits of any SSN listed on the transcript: XXX-XX-1234

  • Last 4 digits of any EIN listed on the transcript:  XX-XXX-1234

  • 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

Additional information you need to know:

  • Currently, the new transcript is only for individual transcript products.

  • For tax professionals, lenders and others with authorization to access the taxpayers’ transcripts, the IRS devised a Customer File Number that the requestor can assign to the taxpayer/transcript request and more easily match individuals and documents.

  • Students using the IRS Data Retrieval Tool through the Free Application for Federal Student Aid (FAFSA) process are not affected. You should follow the normal steps for student aid.

  • The new transcript has been socialized with all our stakeholders, including the banking industry, that require income verification for non-tax related purposes.  Your bank should accept the new transcript to verify your income.

  • Anyone with a need to know will be able to identify the person associated with the transcript. The SSN on a transcript will show last four digits, an individual name will show the first four letters.

For more information, click here to visit the IRS website.

This information has been brought to you by the #IRS

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