1. Verification-IRS Data Retrieval & Tax Transcripts for 2012-2013©
Jim Briggs
The Tax Detective

2. Session Outline Review of Updated Verification Rules
Review of IRS Data Retrieval Process
Review of IRS Tax Transcripts
Q&A

3. IRS Publications IRS Publication 17 – Your Federal Income Tax
IRS Publication 970 – Tax Benefits for Education
IRS Publication 3 – Armed Forces Tax Guide

4. 2012-13 Verification Requirements
Changes outlined in DCL Gen – 2011
30% verification cap eliminated
AGI, Taxes Paid, certain untaxed income - considered verified through IRS data retrieval process if no changes made
All families who qualify are encouraged to use IRS data retrieval
Ineligible families and those that refuse are required to provide:
IRS Tax Return Transcripts and/or
Copies of Foreign Tax Returns

5. Ineligible for IRS Data Retrieval
Filed a Foreign tax return
Married filing separately
Change in marital status after 12/31/XX

6. IRS Data Retrieval - 1 Primary method used by families to verify AGI,
Tax-Exempt Interest Income
Taxes Paid,
Education/First Time Home Buyer Credits
IRA/Pension - Untaxed Income

7. IRS Data Retrieval - 2
Families not eligible or did not use IRS Data Retrieval & selected for verification must submit:
IRS Tax Return Transcript and/or
Copy of foreign tax return and/or
In “rare” cases a paper copy of US tax return

8. IRS Data Retrieval -3
Must list first name shown on IRS tax return filed
Must use EXACT address shown on corresponding tax return
Dept of ED and IRS working to make the process more “user friendly”

9. IRS Data Retrieval – 4 Does Not import “earned income”
Automatically adds 15a-15b and 16a-16b as untaxed income
Does not add line 25

10. Multiple IRSDT’s?
Currently the IRS data on a tax return may only be imported into ONE FAFSA per award year. This causes issues when:
Parent of dependent student is also a student
Student has siblings who are also filing a FAFSA

11. IRS Data Retrieval Codes
02 – The only code that is valid for verification
Correcting rollovers on lines 15 or 16 will trigger a change from 02 and require a tax transcript
Adding “earned income” data will not change the code from 02.

12. IRS Tax Transcripts Provided by the IRS free of charge
Available for processing by IRS:
2-3 weeks after filing for E-filed returns
6-8 weeks after filing for paper filed returns
Transcript should arrive within 5-10 business days after it is available for processing

13. Types of tax transcripts
Tax Return Transcript – reports what was on ORIGINAL tax return (online & phone)
Tax Account Transcript – reports changed data from 1040X or additional 1040 and SOME of the original data. (online & phone)
Record of Account – reports all of the original and changed data (4506-T-EZ or 4506)

14. Ways to obtain Transcripts
How to obtain a tax transcript:
Online – PREFERRED
Phone – Acceptable
Mail – Acceptable but SLOW
IRS Office Walk-In – Frowned Upon

15. Unpaid Taxes
Parent student E-filed – but transcript NOT available. Possible cause:
Federal Tax returns filed before the filing deadline with an unpaid balance due are not “processed” by the IRS until the earlier of:
the filing deadline has passed ( ) or
the tax has been paid

16. IRS Transcript URL IRS URL for Transcripts: Must provide:
Must provide:
SSN or ITIN
Date of Birth
EXACT Street Address as used on tax return
Postal Zip Code

17. How to obtain IRS Transcripts

18. Online Tax Transcript

19. IRS Form 4506-T-EZ Lines 1-4

20. 4506-T-EZ Lines 5-6

21. 4506-T Lines 1-5

22. 4506-T Lines 6-8

23. 4506-T Line 9

24. Tax Transcript Decoder - 1

25. Tax Transcript Decoder - 2

26. Tax Transcript Decoder – 3

27. Tax Transcript Decoder - 4

28. Tax Transcript Decoder - 5

29. Tax Transcript Decoder - 6

30. Tax Transcript Decoder - 7

31. Tax Transcript Decoder - 8

32. Tax Transcript Decoder - 9

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34. Tax Transcript Decoder - 11

35. Tax Transcript Decoder - 12

36. Tax Transcript Decoder - 13

37. Tax Transcript Decoder - 14

38. Tax Transcript Decoder - 15

39. Amended Tax Return
When a 1040X is filed the family will need to provide:
Tax Return Transcript &
Tax Account Transcript OR
Record of Account – available only with filing of T (up to 30 days to receive)

40. Resources NASFAA – Using Federal Tax Returns in Needs Analysis:
Good explanation of 2011 Tax forms, Verification procedures & Tax Return Transcript Decoder
USAFUNDS – Excellent explanation of Verification, 2011 Tax forms and Tax Return Transcript Decoder.

41. Be Calm 2012-13 is a transition year
Dept of ED, IRS, Schools all working together to streamline and simplify verification.
should be much more automated and most of the wrinkles should have been ironed out.

42. Questions?
NCASFAA and Jim Briggs thank you for your participation.