In today’s digital age, safeguarding sensitive taxpayer information is more crucial than ever. As a tax professional, staying informed about changes to IRS processes and regulations is essential to protect both your clients and your practice. In this insightful article, we will discuss the recent updates to the IRS Transcripts Request format, which have been designed to create a roadblock for identity thieves and enhance the overall security of taxpayer information. By understanding the intricacies of the new IRS Transcript Request process, you can ensure seamless access to vital tax data while keeping your clients’ sensitive information secure, thereby strengthening your tax resolution practice’s reputation for trustworthiness and expertise.
It seems a day doesn’t go by without a report being made about data being compromised. It’s not just companies like Twitter or Amazon anymore. Credit card companies, banks, and industries with access to sensitive information are all vulnerable to hacking or human error. Even the IRS is onboard.
Working to better protect taxpayer data, the IRS recently announced it is replacing the current format with a new format for individual tax transcripts. They are expecting that it will redact personally identifiable information from the Form 1040 series.
As of September 23rd, access to this default format will be available via Get Transcript Online, Get Transcript by Mail or the Transcript Delivery System for tax professionals. Financial entries will remain visible. Taxpayers and third parties will have access to data necessary for tax preparation or income verification.
Colleges, lenders, and other third parties that order transcripts for non-tax purposes will also benefit. For this purpose, the IRS created a new Customer File Number they can use as an identifying number instead of the taxpayer’s SSN.
The IRS states that “numbers have been going in the right direction” since 2015, when they began partnering with the states and tax industry. Acting IRS Commissioner, David Kautter, has said great progress has been made in the IRS’ effort to combat identity theft as it relates to refund fraud.
The Internal Revenue Service remains vigilant by evaluating policies and procedures on an ongoing basis. The individual tax transcript area is one of the areas identified as in need of change. The IRS believes the new format will better protect taxpayer data from unauthorized disclosure and theft.
How Do Criminals Commit Taxpayer Identity Theft?
Criminals steal identities by attempting to pose as taxpayers accessing their own accounts. They also pose as tax preparers or third parties requesting client information.
Identity Thieves now need more taxpayer details to better impersonate their victims, making the tax transcript a sought-after document. 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.
HOW WE CAN HELP:
As are other changes this year, the new format requires some understanding. You don’t have to go it alone. IRS Solutions Software is here for you.
IRS Solutions Software gives you the confidence to provide services you may have been uncomfortable with in the past. Another benefit of membership is the training you get on our monthly case study calls.
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