The Tax Times 1

The Tax Times

On August 23, 2018 we posted IRS to Introduce New Tax Transcript as of 9/23/18! IRS announced in IR-2018-171 that it is moving raised protect taxpayer knowledge, in a new format for individual tax transcripts that can redact personally identifiable info from the Form 1040 collection. Now, in a Fact Sheet and accompanying Information Release IR-2018-256, IRS has announced it will likely be making adjustments to tax transcript procedures. In IR-2018-256, the IRS introduced that after working with the tax-preparation group, the internal Revenue Service would cease its tax transcript faxing service as of Feb. 4, 2019, and provide a safer alternative to taxpayers and tax professionals.

The IRS labored with the tax preparation community to succeed in settlement on an alternative that may meet tax practitioners’ wants in e-filing individual tax returns while also enhancing safeguards for taxpayer information. The IRS continues to look for tactics to raised protect taxpayer data and tax transcripts, which are summaries of individuals’ tax returns.

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Cybercriminals who receive tax transcripts use them to file fraudulent returns which can be difficult to detect as a result of them carefully mirror a reputable tax return. The halt to faxing transcripts is one other step taken by the IRS to protect taxpayer knowledge. In September 2018, the IRS started to mask personally identifiable information for every individual and entity listed on the transcript. See New Tax Transcript and Customer File Number. All monetary entries on the transcript remain visible. However, tax practitioners who work to deliver taxpayers into compliance by filing prior-yr tax returns may need access to employer info that taxpayers no longer have. In those instances, tax practitioners may request an unmasked Wage and Income Transcript.

The Wage and Income Transcript can be utilized for current 12 months tax preparation but it typically will not be obtainable till mid-yr. The IRS has a number of ways taxpayers can receive a copy of their tax transcript aside from faxing. Individuals may still name the IRS to acquire a masked tax account transcript and one will likely be mailed to the final address of record. They’ll then view or download a copy of their tax transcript instantly. Starting Jan. 7, 2019, tax professionals who contact the Practitioner Priority Service quantity could, with proper authorization, have an unmasked Wage and Income Transcript deposited of their e-Services secure mailbox.

Tax practitioners should meet sure necessities in order to use the secure mailbox option. Those requirements are outlined in actual fact Sheet 2018-20, Steps for Tax Professionals to acquire Wage and Income Transcripts Needed for Tax Preparation. Practitioners additionally ought to overview Fact Sheet 2018-21, IRS Offers Tricks to Tax Professionals to reduce CAF Number Errors, Better Protect Data from Cyberthieves.

The Wage and Income Transcript offers info restricted to the Forms W-2, 1099, and other earnings documents despatched to the IRS. It does not embrace basic tax transcript information. The Wage and Income Transcript will give tax practitioners the employer information needed to file tax returns electronically. Tax professionals also may request that an unmasked Wage and Income Transcript are despatched to the client’s deal with of record. Alternatively, taxpayers may request an unmasked transcript for tax preparation and will probably be mailed to their deal with of document.