New tax professional practice. The Internal Revenue Service and its Security Summit partners have achieved much success in combating identity theft (see “Tax Matters: IRS Touts Progress Against Taxpayer Identity Theft issues). However, an area identified by this group as still needing more safeguards is the dissemination of tax transcripts. As the internet becomes a bigger target for cyber criminals, tax professionals have become one of the groups they have targeted. New tax professional practice.
Accordingly, effective September 23, 2018, the Internal Revenue Service began redacting personally identifiable information from transcripts issued in August of 2018, and Fact Sheet FS-2018-16, issued in September 2018). Specifically, taxpayer identifying numbers, including Social Security numbers, employer identification numbers, account numbers, including Social Security numbers, and telephone numbers now display only the last four digits. The last name and business name display only the first four characters. The street address is six characters, including spaces. All money amounts are fully disclosed.
At the same time the IRS announced it would stop faxing transcripts to both taxpayers and third parties sometimes in January of 2019. Tax practitioners asked the IRS to reconsider these changes in a November 20, 2018 letter from Annette Nellen, Esq., CPA, to IRS Commissioner Charles Rettig. The IRS delayed its planned end to faxing transcripts, and second it provided a method for authorized tax practitioners to obtain an unredacted wage and income transcript upon request.
The end to faxing transcripts applies to individuals and business taxpayers. When taxpayers or third parties call the IRS with an individual or business transcript request, the transcript will be delivered by postal mail to the taxpayer’s address of record within 5 to 10 business days and not to the practitioner address on Form 2848, Power of Attorney. One of the reasons for this change is that many fax service providers are not on a secure line, and the IRS cannot independently confirm whether the line is secure or not.