United States

IRS announces end to faxed transcripts

TAX ALERT  | 

After June 27, 2019, the IRS will no longer fax the tax individual or business tax transcripts. This prohibition applies regardless of whether the tax transcript is requested by either the taxpayer or a third party, e.g., lenders and tax professionals.

Tax transcripts are commonly requested because the transcript contains summarized information that is identical to what is reported on the original tax return. But unlike tax return copies, tax transcripts are available free of charge. The combination of these two features have made tax transcripts a popular target for identity thieves.

Identity thieves use the information reported on tax transcripts to file fraudulent tax returns for refunds. A fraudulent return based upon a tax transcript is more likely to slip past security safeguards because the return closely resembles a legitimate tax return. Therefore, the IRS is taking this additional step to protect confidential taxpayer data from identity thieves.

In addition to ending faxed transcripts, Forms 4506, 4506-T, or 4506T-EZ will no longer provide the option to mail transcripts to third-parties effective July 1, 2019. Taxpayers, however, may continue to use Form 4506 series to obtain copies of their tax transcripts or tax returns. In the IRS bulletin announcing the end of these services, the IRS lists alternative options for individual taxpayers and for tax professionals to procure the information necessary to provide tax services.

In particular, tax professionals who currently use e-Services’ Transcript Delivery System (TDS) may continue to receive tax transcripts in their e-Services’ secure mailboxes. Attorneys, CPA or Enrolled Agents, who do not have an e-Services’ account, may create one to access client transcripts upon proper authorization from the client. Unenrolled tax practitioners who undergo established procedures may also access TDS. Transcripts delivered through TDS have the taxpayer’s name and Social Security number partially concealed. The transcripts show an individual’s abbreviated first and last name, and only the last four digits of the individual’s social security number.

As a result, tax professionals, who need an unmasked tax transcript, should consider coordinating a request with taxpayers and obtaining it directly from them.

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