IRS Changing Format of Tax Transcripts

A new transcript format is now in place to better protect your information from identity theft. This new transcript partially masks the personally identifiable information of everyone listed on the tax return. All financial entries will remain fully visible to assist with tax preparation, tax representation and income verification.

The IRS is taking this action to better protect taxpayer data. Because of data thefts outside the tax system, cybercriminals often attempt to impersonate taxpayers and tax professionals. Thieves attempt to gain access to transcript data, which can help them file fraudulent tax returns or steal additional data of other individuals listed on the transcript.

Here’s what is visible on the new tax transcript:

• Last four digits of any SSN listed on the transcript: XXX-XX-1234
• Last four digits of any EIN listed on the transcript:  XX-XXX1234
• Last four digits of any account or telephone number
• First four characters of the last name for any individual (first three characters if the last name has only four letters)
• First four characters of a business name
• First six characters of the street address, including spaces
• All money amounts, including wage and income, balance due, interest and penalties

Starting January 7, 2019, tax professionals with proper authorization may request unmasked Wage and Income Transcripts for tax preparation and e-filing purposes. See below for Employer Information for Tax Return Preparation and Electronic Filing.

Starting February 4, 2019, as an additional protection for taxpayer data, the IRS will stop faxing tax transcripts to both individual and business taxpayers, tax professionals and other third parties. Individual taxpayers may use Get Transcript Online to view a masked transcript immediately or order one by mail for delivery to their address of record. Taxpayers may request unmasked transcript for tax preparation.  Unmasked transcripts will be mailed to the taxpayer’s address of record. Business transcripts are not masked and can be obtained by tax practitioners through the Transcript Delivery System.

Customer File Number and Form 4506-T

Because the full Social Security number no longer is visible, the IRS has created an entry for a Customer File Number. This is an optional 10-digit number that can be created usually by third-parties that allow them to match a transcript to a taxpayer. The Customer File Number field will appear on the transcript when that number is entered on Line 5b of Form 4506-T, Request for Transcript of Tax Return and Form 4506T-EZ.

Here’s how it would work for a taxpayer seeking to verify income for a lender: The lender will assign a 10-digit number, for example, a loan number, to the Form 4506-T. The Form 4506-T may be signed and submitted by the taxpayer or signed by the taxpayer and submitted by the lender. The Customer File Number assigned by the requestor on the Form 4506-T will populate on the transcript. The requestor may assign any number except the taxpayer’s Social Security number. Once received by the requester, the transcript’s Customer File Number serves as the tracking number to match it to the taxpayer. 

Get Transcript (Taxpayers) and the Customer File Number

Only individual taxpayers may use Get Transcript Online or Get Transcript by Mail. Many taxpayers use this service to satisfy requests for income verification. The Customer File Number will be available for Get Transcript users starting January 14, 2019. Taxpayers can manually enter a Customer File Number assigned to them, for example, by a lender or college financial office. That Customer File Number will display on the transcript either when it is downloaded or when it is mailed to the taxpayer.

Transcript Delivery System (Tax Professionals) and the Customer File Number

The Transcript Delivery System is for use only by tax professionals with proper authorization to access taxpayer transcripts. Tax Professionals authorized to access transcripts can enter a 10-digit Customer File Number that automatically will populate on the transcript provided through TDS. This process allows high-volume users to match the transcript to the taxpayer.

Employer Information for Tax Return Preparation and Electronic Filing

If you are a taxpayer seeking to file a current or prior year tax return or a tax professional preparing a current or prior year return for a client, please remember that all financial entries on all transcript types are fully visible. If you are seeking a missing Form W-2 or Form 1099 information, there is a process for obtaining those current-year documents.

Starting January 7, 2019, if an unmasked Wage & Income transcript is necessary for tax return preparation and electronic filing, a tax professional may contact the Practitioner Priority Service line. An unmasked Wage and Income Transcript will fully display employers’ names, addresses and Employer Identification Numbers (EINs) needed for tax software preparation and for electronic filing. If the tax professional has proper taxpayer authorization, an unmasked Wage and Income transcript will be sent to the practitioner’s Secure Object Repository (SOR), available through e-Services. Tax professionals must have an e-Services account and pass Secure Access authentication to use the SOR option. The secure mailbox option has some requirements, which are outlined in Fact Sheet 2018-20, Steps for Tax Professionals to Obtain Wage and Income Transcripts Needed for Tax Preparation. 

Alternatively, taxpayers or other third parties who require an unmasked transcript for tax return preparation or filing may contact the IRS, present proper authentication to prove their identities and an unmasked transcript will be mailed to the taxpayer’s address of record.