On December 19, 2018, the Internal Revenue Service announced, with IR-2018-256, that there will be a way for tax professionals to receive unmasked transcripts for tax return preparation. The announcement has been applauded by tax professionals across the nation. The IRS, in an effort to curb identity theft had decided to have professionals and taxpayers receive redacted transcripts in lieu of the unmasked transcripts beginning this year. In order to receive an unmasked transcript, a taxpayer or professional would have to call the IRS and request that these transcripts be sent to the last address of record of the taxpayer, causing a logjam for most professionals.
When a taxpayer has not filed a tax return for many years, or has lost their tax forms, a professional, with proper authorization, was able to obtain all information forms for the taxpayer by requesting a Wage and Income (W&I) Transcript from the IRS. This transcript listed all the information that a tax professional needed to efile a tax return for the taxpayer.
The information was the name of the reporting institution, address and Employer Identification Number (EIN) of the reporting agency. The tax professional could obtain these documents by means of calling the IRS, and having them fax the information to the tax professional or online with an Eservices account.
Earlier this year, the Service, as a means to curb the increase of identity theft, decided to redact this pertinent information. The redacted transcripts made it hard for tax professionals to bring taxpayers into compliance, because with the redacted information, the professional could not e-file the tax return. This left the tax professional community reeling and confusion on how to bring a taxpayer into compliance.
Beginning February 4, 2019, the IRS will halt faxing transcripts to tax professionals. When calling the Practioner Priority Service (PPS), a tax professional could request a transcript be faxed to them by the IRS. The IRS PPS, would read the professional a disclaimer, before faxing a transcript, that alerted the professional that faxing was not a secure means of obtaining this information.
Starting January 7, 2019, tax professionals who contact the PPS number may, with proper authorization, have an unmasked W&I Transcript deposited in their e-Services secure mailbox.
The W&I Transcript provides information limited to the Forms W-2, 1099 and other income documents sent to the IRS. It does not include general tax transcript information. The W&I Transcript will give tax practitioners the employer information needed to file tax returns electronically.
Tax professionals also may request that an unmasked Wage and Income Transcript be sent to the client’s address of record. Alternatively, taxpayers may request an unmasked transcript for tax preparation, which it will be mailed to their address of record.