The IRS has recently made some updates to the format of transcripts. The National Taxpayer Advocate describes the updates in a two part blog series you can find here and here. If you have been wondering why the transcript appearance you have grown accustomed to viewing is different, read the posts to gain a better understanding of the format changes the IRS has adopted. If you do not regularly read transcripts, you might read the posts in order to understand what is available to you on the various transcripts that the IRS offers. In my clinic transcripts provide the basic building block for any collection case and often provide useful information on cases involving a contest on the merits.
The blog posts also describe the path to obtaining transcripts which has changed recently for the better. We went through a period where I felt we were operating almost in the dark because it became so difficult to obtain transcripts. The change over the last several months to electronic submission of transcript requests has significantly improved the process and should take pressure off of the IRS since the inability to obtain transcripts going through the Centralized Authorization File (CAF) unit causes practitioners to tie up precious phone lines trying to obtain transcripts. The description in the post includes a description for individuals seeking to obtain their own transcripts. For individuals with computer access, computer skills and the proper identification, this can provide an easy means to gaining information about their status with the IRS.
One of the changes described in the NTA’s posts concerns masked and unmasked wage and income transcripts. I asked for clarification on the terminology which I did understand after reading the first post. Here is the explanation:
The new transcript partially masks personally identifiable information, leaving only a portion of this information visible. The new format is referred to as a masked transcript, while transcripts that fully show all personally identifiable information are referred to as unmasked transcripts. The following information is visible on a masked transcript:
● Last four digits of any SSN on the transcript: XXX-XX-1234 ● Last four digits of any EIN on the transcript: XX-XXX1234 ● Last four digits of any account or telephone number ● First four characters of first name and first four characters of the last name for any individual (first three characters if the name has only four letters) ● First four characters of any name on the business name line (first three characters if the name has only four letters) ● First six characters of the street address, including spaces ● All money amounts, including wage and income, balance due, interest and penalties
Working at the IRS Chief Counsel’s Office I had the luxury for many years of having access to individuals with deep expertise in reading the IRS transcripts. Because I read them for many years and had numerous tutorials while working there, I have a head start on someone unfamiliar with the way the IRS records transactions. Learning how to read transcripts can unlock many secrets. We should probably have more CLE training on this “art” because there is much to learn. Kudos to the NTA for aiding in this process.
Why Taxes? Why Now?
"We opened up shop here in the Wylie, Sachse, Murphy area in 2018 with a passion to help start-ups and small businesses get on top of their bookkeeping,” Allen explains.
“What we found was a lot of folks just don’t get the tax game. And now that there are new laws and regulations, many are starting to panic; but trust me, small businesses have everything to gain with the new Section 179 Deductions.
“After filing a few late returns, in that first year, we learned that there is a real need for some tax expertise. We spent a good part of 2018 getting up to speed on tax law, and now I am an Enrolled Agent, federally licensed to practice before the IRS on behalf of my clients and anyone else who may be facing the daunting ‘IRS boogie man.’
“During tax season, we are prepared to handle it all.
For individuals we have helped folks with past-due tax returns and work with the IRS to eliminate all penalties... sometimes we given get rid of the tax debt itself.
For companies the biggest problem businesses of all sizes have is filing and paying their payroll taxes - both state and federal - on time. The rules for 940s and 941s are extremely confusing so we have helped a lot of companies catch up.
If they like our work, they sometimes retain us for bookkeeping and payroll.
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