IRS Building photo courtesy of TravelingOtter

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The IRS’s Three Pase Plan

Back in August, the IRS announced some changes to be made to the tax transcript process. This is to due past hacks by cyber-criminals. There are three phases to this plan and we are almost to phase two already (which begins in January). The AICPA is most concerned with these last two phases. Phase two takes away the option of faxing transcripts to taxpayers and their representative(s). Phase three will end the mailing of transcripts to the representative(s) taxpayers (e.g. your accountant).

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So Why Is There Concern?

Well, these extra hoops to jump through may cause delays in a tax preparer’s ability to perform tasks in a timely manner. Annette Nellen, the AICPA Tax Executive Committee chair, noted that “transcripts are most often used by taxpayers to understand their status with the IRS (such as an IRS audit), complete accurate tax returns, resolve tax notices or discrepancies, and verify tax return information for legal purposes.” Additionally, in these cases, there is a deadline and it is usually impractical to request an extension.

To resolve tax preparers’ access, Nellen suggests that if practitioners provide a valid Form 8821 or Form 2848 they should be able to receive said transcript without the extra hoops.

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A New Scam

Furthermore, speaking of tax transcripts, the IRS has warned taxpayers of a new scam. In this ruse, cyber-criminals impersonate the IRS through an email with an attachment that is claimed to be the taxpayer’s transcript. Opening the attachment is how taxpayers receive malware.

Remember the IRS does not send unsolicited emails to the public or sensitive documents over email. If you receive an email of this nature do not open it, delete it or forward it to phishing@irs.gov.

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Sources

Learn more about the AICPA’s concerns.

You can also learn more about the transcript scam.

Lastly, learn more about our services!

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