Get your 2019-2020 IRS Tax Return and Transcript Matrix for FAFSA Verification

2019-2020 TAX TRANSCRIPT MATRIX

We’ve updated the IRS Tax Return and Transcript Matrix that Financial Aid Professionals use to complete FAFSA verification. Although the U.S. Department of Education announced earlier this year that institutions may accept a signed copy of an individual’s tax return for verification this year, some students and families may still submit an official IRS Tax Return Transcript to your office for verification. It’s helpful to know which line items from the tax return, the tax transcript, and the FAFSA and ISIR correspond. Click the link below to download a copy for yourself.

2019-2020 IRS Tax Return And Transcript Matrix For FAFSA Verification 072019

 

FSA ANNOUNCES SCHOOLS CAN ACCEPT SIGNED TAX RETURNS

BREAKING NEWS – FSA ANNOUNCES SCHOOLS CAN ACCEPT SIGNED TAX RETURNS FOR VERIFICATION

Federal student Aid just released guidance allowing schools and college financial aid administrators to accept a signed copy of a 2016 or 2017 income tax return in lieu of tax transcript for the 2018-2019 and 2019-2020 award years as applicable. The announcement provides immediate relief to students beleaguered with problems obtaining the official IRS tax return transcript as has been required until now.

Students and parents who did not file and were not required to file a tax return are still required to provide verification of nonfiling from the IRS, but under the new guidance if the individual is unable to obtain verification of nonfiling from the IRS or other tax authorities and, based upon the institution’s determination, it has no reason to question the student’s or family’s good-faith effort to obtain the required documentation the institution may accept:

  • A signed statement certifying that the individual
    • Attempted to obtain the verification of nonfiling from the IRS or other tax authorities and was unable to obtain the required documentation; and
    • Has not filed and is not required to file a 2016 or 2017 income tax return, and a listing of the sources of any 2016 or 2017 income earned by the individual from work and the amount of income from each source; and
  • A copy of IRS Form W–2, or an equivalent document, for each source of 2016 or 2017 employment income received by the individual.

FSA also released an announcement informing the Financial Aid community that the Central Processing System will be skipping the database match with Selective Service System during the government shutdown.

According to the electronic announcement, FSA states that “during this match bypass, Student Aid Reports (SARs) and Institutional Student Information Records (ISIRs) will display Comment Code 390: “We were unable to verify your eligibility for federal student aid with one or more other federal agencies through computer matching programs. Your school will contact you if additional information is needed.”  The CPS will assign a blank value to the Selective Service Match Flag on SARs and ISIRs unless the corrected transaction already has a valid SSS match flag value that the CPS can pull forward to the new transaction. “

When the shutdown is over, CPS will reprocess ISIR records for impacted students. You can read all about it here in this electronic announcement from FSA.


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ISIR CORRECTIONS DUE TO TRANSFER OF INCORRECT TAX YEAR DATA FROM IRS

According to a recent announcement from Federal Student Aid (FSA), some FAFSA applicants who attempted to file a correction to their 2018-2019 FAFSA received 2017 tax year data instead of the correct 2016 tax year data. It appears that this glitch affected only a small number of applicants, particularly those who made a correction to their 2018-2019 FAFSA between September 30, 2018, and October 4, 2018, and used the IRS Data Retrieval Tool to transfer their tax information from the IRS to the FAFSA. FSA identified the issue and resolved the problem with the IRS Data Retrieval Tool on October 4th, 2018, so it shouldn’t happen again.

2018-2019 ISIR CORRECTIONS MADE DUE TO TRANSFER OF INCORRECT TAX YEAR DATA FROM IRS

On October 26, 2018, the Central Processing System reprocessed the ISIRs of affected applicants and voided the bad transactions – but they did NOT correct the tax information so ISIR corrections still need to be made. Instead, emails are being sent to affected applicants alerting them to the problem and informing them to go online and make another ISIR correction by transferring the correct 2016 IRS tax information to the FAFSA using the DRT. This issue reportedly impacted a very small number of applicants, but it is important to note that the reprocessed transactions are intended solely to alert impacted applicants and institutions that action is required; the CPS reprocessing did not modify the financial information transferred from the IRS.

Several methods exist for schools to identify records resulting from the October 26 reprocessing:
Reprocessed Institutional Student Information Records (ISIRs) will be sent under the IGSG19OP message class.
SARs and ISIRs will include SAR comment code 172, which states “This SAR was produced because we processed a change to your information based on information reported to us by another agency or because of a processing system change. Review your SAR to see what effect, if any, this change has had on your application, and call 1-800-4-FED-AID (1-800-433-3243) if you have any questions.”

ISIRs produced because of the reprocessing will include a value of “04” for the Reprocessed Reason Code (ISIR field #248).

The FAA Information page in Student Inquiry on the FAA Access to CPS Online Web site will display “04 – Reprocessed for wrong tax year transferred from IRS DRT” for the Reprocessing Code for the transaction resulting from the reprocessing. The Reprocessing Reason Code 04 description will not display in FAA Access to CPS Online until after FSA implements updates to the site in a future release.

IRS ANNOUNCED UPDATED TAX TRANSCRIPTS REDACTING SENSITIVE INFORMATION

As we reported last month, the IRS recently announced that as of September 23, the individual tax return transcript(s) was replaced with an updated version that redacts sensitive personal identifying information of the tax filer. These changes are part of an effort to continue to combat stolen identity refund fraud, and to protect taxpayer information.

At the end of the current calendar year, when taxpayers or third parties call the IRS with a transcript request, the transcript will be mailed to the taxpayer’s address of record. The transcript will not be faxed on request to either the taxpayer or a third party.

According to a recent electronic announcement from FSA here’s what’s changed on the IRS Tax Transcripts

As part of the verification process, students (and if applicable their spouses or parents) may be required to submit to institutions a copy of their income and tax information via a tax transcript. The IRS has announced that with the launch of the new tax transcripts the following information will now display:

  • Last 4 digits of any SSN listed on the transcript (e.g. XXX-XX-1234)
  • Last 4 digits of any EIN listed on the transcript (e.g. XXX-XX1234)
  • Last 4 digits of any account or telephone number
  • First 4 characters of the last name of any individual
  • First 4 characters of a business name
  • First 6 characters of the street address, including spaces
  • All money amounts, including balance due, interest and penalties

Based on their review of the changes to the IRS tax transcripts, they do not believe that the redaction of sensitive personal information will pose a significant burden for institutions in using the new tax transcripts for verification purposes. Institutions should still be able to identify and match the tax payer information on the tax transcript with the FAFSA information on file either by use of the limited redacted information provided on the tax transcript or by use of the new “Customer File Number” available on the new transcript. As a result, the IRS tax transcript is still acceptable documentation for verification purposes.

Additional changes were made to the IRS forms 4506-Td 4506T-EZ provide an opportunity for the tax filer to provide a Customer File Number which is optional and available for the filer to use when using the form to request a transcript. Starting early next calendar year tax payers may also assign a Customer File Number to their tax transcript that they obtain through Get Transcript On-line and Get Transcript On-Line By Mail. Up to 10 numeric characters, such as a student identification number, can be included to better assist institutions in matching the tax transcript to the appropriate student.

In the spring of 2019 the IRS plans to remove the option for requesting third-party receipt of tax information from Form 4506-T and 4506T-EZ.  Instead, transcripts will be mailed only to the taxpayer’s address of record. Institutions still interested in receiving tax transcripts directly from the IRS may request to become participants in the IRS’ Income Verification Express Services [IVES] program by registering for e-Services on IRS.gov.

For more information from FSA, check out this electronic announcement here.

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2018-2019 ISIR CORRECTIONS DUE TO TRANSFER OF INCORRECT TAX YEAR DATA

According to a recent announcement from Federal Student Aid (FSA), some FAFSA applicants who attempted to file a correction to their 2018-2019 FAFSA received 2017 tax year data instead of the correct 2016 tax year data. It appears that this glitch affected only a small number of applicants, particularly those who made a correction to their 2018-2019 FAFSA between September 30, 2018 and October 4, 2018 and used the IRS Data Retrieval Tool to transfer their tax information from the IRS to the FAFSA.  FSA identified the issue and resolved the problem with the IRS Data Retrieval Tool on October 4th, 2018, so it shouldn’t happen again.

On October 26, 2018 the Central Processing System reprocessed the ISIRs of affected applicants and voided the bad transactions – but they did NOT correct the tax information so ISIR corrections still need to be made. Instead, emails are being sent to affected applicants alerting them to the problem and informing them to go on line and make another ISIR correction by transferring the correct 2016 IRS tax information to the FAFSA using the DRT. This issue reportedly impacted a very small number of applicants, but it is important to note that the reprocessed transactions are intended solely to alert impacted applicants and institutions that action is required; the CPS reprocessing did not modify the financial information transferred from the IRS.

Several methods exist for schools to identify records resulting from the October 26 reprocessing:

Reprocessed Institutional Student Information Records (ISIRs) will be sent under the IGSG19OP message class.

SARs and ISIRs will include SAR comment code 172, which states “This SAR was produced because we processed a change to your information based on information reported to us by another agency or because of a processing system change. Review your SAR to see what effect, if any, this change has had on your application, and call 1-800-4-FED-AID (1-800-433-3243) if you have any questions.”

ISIRs produced because of the reprocessing will include a value of “04” for the Reprocessed Reason Code (ISIR field #248).

The FAA Information page in Student Inquiry on the FAA Access to CPS Online Web site will display “04 – Reprocessed for wrong tax year transferred from IRS DRT” for the Reprocessing Code for the transaction resulting from the reprocessing. The Reprocessing Reason Code 04 description will not display in FAA Access to CPS Online until after FSA implements updates to the site in a future release.

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