Many individuals may not know they can request, receive, and review their tax records via a tax transcript from the IRS at no charge. Transcripts are often used to validate income and tax filing status for mortgage applications, student loans, social services, and small business loan applications and for responding to an IRS notice, filing an amended return, or obtaining a lien release. Transcripts can also be useful to taxpayers when preparing and filing tax returns by verifying estimated tax payments, Advance Child Tax Credits, Economic Income Payments/stimulus payments, and/or an overpayment from a prior year return.

The IRS maintains records for all taxpayers – individuals, businesses, and other entities – and provides five types of transcripts. A requested transcript may provide information regarding the date the IRS received a return; payment history including refunds, transfers between tax years and overpayment credits; balance due amounts; interest assessed; refundable credits allowed; basic examination information; and Forms W-2 or 1099 information.

Taxpayers may be able to get answers to their questions quickly and efficiently by requesting and reviewing their transcript – that is, if they can decipher them. Taxpayers (and tax professionals with a properly executed Form 2848, Power of Attorney, or Form 8821, Tax Information Authorization) can request a transcript online through the IRS’s Get Transcript Online portal or their online account; by mail; or by calling the IRS’s automated phone transcript service at 800-908-9946. With the difficulty reaching the IRS by phone or correspondence during the last two filing seasons, using the portal or online account may be more efficient than calling the IRS due to long wait times, the potential inability to speak with an available customer service representative, or the length of time for the IRS to respond to a mailed transcript request. The IRS’s Get Transcript page is available in five languages, and the online application is also available in Spanish.

What Transcript Should Taxpayers Ask For?

There are several types of transcripts that can meet a taxpayer’s needs.

• Tax Return Transcript: This shows most items reflected on a taxpayer’s original tax return, including adjusted gross income, and accompanying forms and schedules for the current year and three prior years. This transcript will often be accepted by lending institutions for student loan or mortgage purposes. Note: the secondary spouse on a joint return must use Get Transcript Online or Form 4506-T to request this transcript type. When using Get Transcript by Mail or phone, the primary taxpayer on the return must make the request.
• Wage and Income Transcript: This provides data from the third-party information statements the IRS has received for a specific taxpayer, such as Forms W-2, 1099, 1098, or 5498, and can be useful if the taxpayer did not receive or retain a copy of these documents. Wage and Income Transcripts are available for up to ten years. While the Wage and Income transcript provides federal withholding amounts, it does not reflect state tax withholdings, which may limit its use when preparing state income tax returns.
• Tax Account Transcript: This provides basic tax return data (marital status, adjusted gross income, taxable income) along with listing the activity on a tax account, such as tax adjustments, payments, etc., for the current year and up to ten prior years using Get Transcript Online. When using Get Transcript by Mail or phone, taxpayers are limited to the current tax year and returns processed during the prior three years.
• Record of Account Transcript: This is the most comprehensive transcript. It combines the Tax Return Transcript and the Tax Account Transcript to provide a more complete picture of a taxpayer’s tax return and subsequent account activity for the current year and for returns processed in the three prior years.
• Verification of Non-Filing Letter: This provides proof that the IRS has no record of a filed Form 1040-series tax return for the year requested. However, it doesn’t indicate whether a taxpayer was required to file a return for that year. This letter is available after June 15 for the current tax year or any time for the prior three tax years using Get Transcript Online.

Another Option: Log in to Your Personal Online Account

Individual taxpayers with an Online Account can immediately access the above transcript options for the current filing year and three prior years and in some cases up to ten years of data. They can also see the total amount owed, balance details by year, payment history and any scheduled or pending payments; key information from the most recent tax return; payment plan details, if the taxpayer has one; digital copies of select notices from the IRS; Economic Impact Payments received, if any; the address on file; and any authorization requests from tax professionals. If taxpayers have not created an online account, this may be the impetus to do so, but be aware many taxpayers are not able to pass the authentication process. The IRS will be updating its authentication process by the end of the year, which is anticipated to reduce the unsuccessful attempts to establish an online account.

Tax Professionals’ Access to Taxpayer Transcript

Tax professionals with an authorized power of attorney on file can review a client’s transcript by accessing the IRS’s e-Services Transcript Delivery System to obtain a masked Wage and Income Transcript. If employer information is needed for tax return preparation, tax practitioners may order an unmasked Wage and Income Transcript if the client does not have the employment information. The practitioner must have a Centralized Authorization File (CAF) number in good standing and have an e-Services account and access to the SOR, the e-Services secure mailbox.

Tax practitioners who meet those requirements should:

1. Call the Practitioner Priority Service line;
2. Authenticate identity with CAF number, name, Social Security number, and date of birth;
3. Fax a completed authorization form (if needed);
4. Request an unmasked Wage and Income Transcript; and
5. Access the e-Services secure mailbox to receive the unmasked Wage and Income Transcript.

Tax practitioners who do not have an e-Services account or SOR access may request that the unmasked Wage and Income Transcript be mailed to the client’s address of record.

Stay tuned for Part II: Decoding IRS Transcripts and the New Transcript Format.