Transcript IRS Data Retrieval

Jim Briggs
The Tax Detective
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Review of Updated Verification Rules
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Review of IRS Data Retrieval Process
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Review of IRS Tax Transcripts
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Q&A
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IRS Publication 17 – Your Federal Income Tax
IRS Publication 970 – Tax Benefits for
Education
IRS Publication 3 – Armed Forces Tax Guide
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Changes outlined in DCL Gen 11-13 – 2011
◦ 30% verification cap eliminated
◦ AGI, Taxes Paid, certain untaxed income considered verified through IRS data retrieval
process if no changes made
◦ All families who qualify are encouraged to use IRS
data retrieval
◦ Ineligible families and those that refuse are
required to provide:
 IRS Tax Return Transcripts and/or
 Copies of Foreign Tax Returns
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Filed a Foreign tax return
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Married filing separately
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Change in marital status after 12/31/XX
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Primary method used by families to verify
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AGI,
Tax-Exempt Interest Income
Taxes Paid,
Education/First Time Home Buyer Credits
IRA/Pension - Untaxed Income
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Families not eligible or did not use IRS Data
Retrieval & selected for verification must
submit:
◦ IRS Tax Return Transcript and/or
◦ Copy of foreign tax return and/or
◦ In “rare” cases a paper copy of US tax return
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Must list first name shown on IRS tax return
filed
Must use EXACT address shown on
corresponding tax return
Dept of ED and IRS working to make the
process more “user friendly”
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Does Not import “earned income”
Automatically adds 15a-15b and 16a-16b as
untaxed income
Does not add line 25
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Currently the IRS data on a tax return may
only be imported into ONE FAFSA per award
year. This causes issues when:
◦ Parent of dependent student is also a student
◦ Student has siblings who are also filing a FAFSA
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02 – The only code that is valid for
verification
Correcting rollovers on lines 15 or 16 will
trigger a change from 02 and require a tax
transcript
Adding “earned income” data will not change
the code from 02.
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Provided by the IRS free of charge
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Available for processing by IRS:
◦ 2-3 weeks after filing for E-filed returns
◦ 6-8 weeks after filing for paper filed returns
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Transcript should arrive within 5-10 business
days after it is available for processing
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Tax Return Transcript – reports what was on
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Tax Account Transcript – reports changed
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Record of Account – reports all of the original
ORIGINAL tax return (online & phone)
data from 1040X or additional 1040 and
SOME of the original data. (online & phone)
and changed data (4506-T-EZ or 4506)
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How to obtain a tax transcript:
◦ Online – PREFERRED
◦ Phone – Acceptable
◦ Mail – Acceptable but SLOW
◦ IRS Office Walk-In – Frowned Upon
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Parent student E-filed – but transcript NOT
available. Possible cause:
Federal Tax returns filed before the filing
deadline with an unpaid balance due are not
“processed” by the IRS until the earlier of:
◦ the filing deadline has passed (4-17-2012) or
◦ the tax has been paid
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IRS URL for Transcripts:
◦ https://sa2.www4.irs.gov/irfof-tra/start.do
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Must provide:
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SSN or ITIN
Date of Birth
EXACT Street Address as used on tax return
Postal Zip Code
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When a 1040X is filed the family will need to
provide:
◦ Tax Return Transcript &
◦ Tax Account Transcript
◦ OR
◦ Record of Account – available only with filing of
4506-T (up to 30 days to receive)
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NASFAA – Using Federal Tax Returns in Needs
Analysis:
◦ Good explanation of 2011 Tax forms, 2012-13
Verification procedures & Tax Return Transcript
Decoder
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USAFUNDS – Excellent explanation of 201213 Verification, 2011 Tax forms and Tax
Return Transcript Decoder.
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2012-13 is a transition year
Dept of ED, IRS, Schools all working together
to streamline and simplify verification.
2013-14 should be much more automated
and most of the wrinkles should have been
ironed out.
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NCASFAA and Jim Briggs thank you for your
participation.