Types of IRS Tax Transcripts
The IRS offers various types of tax transcripts, which taxpayers sometimes need for various purposes, including new employment, buying or selling a home, or opening a new financial account.
In a blog post (10/05/2021), titled Decoding IRS Transcripts and New Transcript Format, the National Taxpayer Advocate discusses the different types of IRS transcripts and the information they contain.
An IRS transcript is a record of a taxpayer's tax information. The IRS has five different types of transcripts and each type contains a different mix of taxpayer information.
Below are the different types of transcripts a taxpayer can request from the IRS and the information they contain:
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Tax Return Transcript: A return transcript 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.
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Wage and Income Transcript: This transcript 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 (IRA contribution information), and Superseding Returnscan 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.
Caution: Wage and Income transcripts can be used to prepare a taxpayer's federal Form 1040 because it provides federal withholding amounts. However, this transcript does not reflect state tax withholding, which may limit its use when preparing state income tax returns.
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Tax Account Transcript: An account transcript provides basic tax return data (marital status, adjusted gross income, taxable income) along with listing the activity in the taxpayer's tax account, such as tax adjustments, payments, etc.
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Record of Account Transcript: A record of account 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. Record of Account Transcripts are only available for the current year and for returns processed in the three prior years.,
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Verification of Non-Filing Letter: This "transcript" 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. Note: A Verification of Non-Filing Letter doesn't verify that a taxpayer wasn't required to file a return, just that the taxpayer didn't file one.,
How Taxpayers Can Get an IRS Transcript
Taxpayers can get IRS transcripts by:
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Calling the IRS (requested transcripts will be mailed to the taxpayer) or
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Going to the IRS's Get Transcript webpage ,and submitting an online transcript request. A taxpayer can choose to have transcripts they requested online mailed to them or delivered to their online account.
If the taxpayer chooses to have their transcripts delivered to their online account, they will be able to access all five transcript types and review and/or download them immediately.
How Tax Professionals Can Get Client Transcripts
Tax professionals with a Form 2848, Power of Attorney, or Form 8821, Tax Information Authorization, on file can obtain a client's transcript by accessing the IRS's e-Apply Services Transcript Delivery System (TDS). Generally, tax professionals requesting Wage and Income (W&I) Transcripts through TDS will be provided with masked transcripts. This means certain information, such EINs, SSNs and account numbers, will display only partial numbers or names.
If the tax professional needs unmasked wage and income information to prepare a client's tax return, the tax professional may order an unmasked W&I Transcript. To order an unmasked W&I transcript, the practitioner must have a Centralized Authorization File (CAF) number in good standing, have an e-Services account, and access to the e-Services secure mailbox.
Tax practitioners who meet those requirements should:
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Call the Practitioner Priority Service line;
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Authenticate their identity with their CAF number, name, Social Security number, and date of birth; 3. Fax a completed authorization form to the IRS assistor (if authorization is not already on file with CAF unit);
4. Request an unmasked Wage and Income Transcript.
After following these steps, the practitioner should access their e-Services secure mailbox to download the client's unmasked Wage and Income Transcript.
Note: A practitioner with a new client using this method to obtain transcripts may need to wait up to two weeks for the CAF unit to process their Form 2848 before getting TDS access to their client's transcripts.
Tax practitioners who do not have an e-Services account or access to e-Services secure mailbox may ask the IRS to mail unmasked Wage and Income Transcript(s) to the client's address of record.
California Differences
California taxpayers or tax professionals can obtain information about account balances, payment history, notices and correspondence, proposed assessments and more by setting up and using “MyFTB” accounts. For tax professionals, access to client tax account information is based on the tax pro’s relationship and online permission level. See details and establish an account on the FTB’s website: https://www.ftb.ca.gov/myftb/index.asp