IRS Transcripts.

• Author: Solodchikova, Alina

The Experts: Alina Solodchikova, Mary Slonina, and Whitney Brady

Internal Revenue Service tax transcripts can be a valuable tool when a tax professional is amending a tax return, filing a tentative claim for refund, verifying entity elections, tracking payments and credits, monitoring the IRS' processing of filings, and determining information about an entity, like its filing status and the end of its tax year.

Question: What tax transcripts can be obtained from the IRS, and what are some specific circumstances in which tax transcripts prove useful?

There are a variety of tax transcripts. Tax transcripts contain the information that taxpayers transmit to the IRS by filing a tax return, filing information returns, filing elections, submitting correspondence, or making payments. The IRS synthesizes that information in a database known as the Integrated Data Retrieval System (IDRS). This information is divided into the Individual Master File (IMF), the Business Master File (BMF), the Employee Plans Master File (EMPF), and the Individual Retirement Account File. (1)

How a taxpayer or practitioner obtains tax transcripts has changed in recent years due to steps the IRS has taken to modernize its information technology systems and safeguard sensitive taxpayer information. To obtain tax transcripts, those seeking taxpayer information must meet specific authorization requirements, because the IRS is legally bound to protect taxpayer information and as a result will not release information if authorization procedures are not successfully followed.

How to Obtain Transcripts

Taxpayer employees may interact with the IRS by verifying particular taxpayer information through specific lines of authorization questioning by the IRS; such authorization questioning potentially allows the mailing of certain transcripts. (2) However, a direct method for a taxpayer representative, either an internal employee or a third-party representative, to substantiate authorization and obtain a transcript is to file Form 2848, Power of Attorney and Declaration of Representative, or Form 8821, Tax Information Authorization, with the IRS.

There are specific procedures through which tax transcripts can be obtained with a Form 2848 or Form 8821 authorization. In 2019, the IRS changed its procedures to disallow faxing most transcripts to taxpayers and practitioners. (3) At the same time, the IRS amended Form 4506-T, Request for Transcript of Tax Return, to end mailing of transcripts to third parties. Today, to obtain tax transcripts, practitioners need an IRS e-services account to access the Transcript Delivery Service (TDS) on www.irs.gov. (4) Through TDS, tax practitioners can access the following specific transcripts: tax return transcripts, tax account transcripts (with the civil penalty module as a subcategory transcript), wage and income documents (for individuals), record of account transcripts, and verification of non-filing letters.

TDS offers two methods for requesting transcripts. The first is to submit Form 2848 or Form 8821 to the IRS Centralized Authorization File (CAF) unit. After the CAF unit processes the form, tax practitioners can then log into their TDS account and access transcripts for authorized taxpayer accounts. However, if the CAF unit has not processed authorization, then a second method allows practitioners to obtain transcripts through a TDS account. A taxpayer representative may call the appropriate IRS telephone assistor line, and while on the line with the assistor, the representative can fax the authorization form to the assistor.

The assistor will review the authorization form for validity while on the line with the representative, and after validation is completed, the IRS assistor may electronically send the requested transcript to the practitioner's secure e-services mailbox using the practitioner's TDS username. If...