By Taxpayers that need prior years’ tax returns and other tax documents should know that there is a new format for individual tax transcripts that redacts personally identifiable information from Form 1040 tax documents.
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.
There is also a new IRS 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.
The new tax transcript was created in response to criminal activity that made it a sought-after document whereby criminals attempt to pose as taxpayers accessing their own account or as tax preparers or third parties requesting client information.
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
An updated Form 4506-T and Form 4506T-EZ, Request for Transcript of Tax Return, will be available on September 23, 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.
As of September 23, 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. A Customer File Number can be, for example, a loan account number.
Line 5b is an optional line, intended for those third parties that request high volumes of transcripts.
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.