ISSUES REPORTED WITH IRS DRT FLAGS

FSA identified two issues that are occurring with data flags associated with the Internal Revenue Service Data Retrieval Tool on the 2018-2019 FAFSA on the web. The glitch appears to be doing one of two things; providing conflicting processed results or preventing the use if the IRS DRT and corre4ctions to financial data on certain transactions. FSA said that both issues would be fixed by the end of January but hasn’t yet announced the date of any corrections or reprocessing. In the meantime, they offer a description of both issues and a workaround for FAOs in the January 16, 2018 Electronic Announcement.

Issue #1: IRS Request Flag Not Updating Correctly in Limited Circumstances

We have confirmed that, in limited circumstances, schools are receiving applicant transactions that have an IRS Request Flag of 02 (IRS data for the [student/parent] was transferred from the IRS and was not changed by the user prior to submission of an application or correction) and an IRS Data Field Flag of 2 (IRS data was transferred and changed by user to a different value) for the student or parent Tax Return Filing Status field.

This conflicting flag value scenario occurs when the student or parent corrects the Tax Return Filing Status value after transferring data into the FAFSA form using the IRS DRT. The resulting transaction should display an IRS Request Flag of 03 (indicating the IRS data for the student/parent was transferred from the IRS and changed by the user) instead of 02. For example, if the applicant or parent corrects the Tax Return Filing Status from “Single” to “Head of household” after transferring data into fafsa.gov using the IRS DRT, the IRS Data Field Flag associated with the Tax Return Filing Status is correctly set to 2 indicating that the tax return filing status was changed. However, the IRS Request Flag remains set, incorrectly, to 02.

Workaround/Resolution:

We expect to have a correction in place by late January 2018, so that the IRS Request Flag is correctly set for subsequent transactions. In the meantime, for the remainder of the 2018-19 FAFSA processing cycle, financial aid administrators (FAAs) may accept an IRS Request Flag of 02 when the only IRS Data Field Flag equal to ‘2’ is the Tax Return Filing Status field. This allows FAAs to continue to consider these transactions as verified should the application be selected for verification.

Issue #2: IRS Request Flag 06 Not Updating Correctly, Preventing IRS DRT Usage

We have identified instances in which 2018-19 transactions include an IRS DRT Request Flag of 06, indicating that the student or parent is ineligible to use the IRS DRT, even though the information on the transaction would suggest otherwise. In these instances, fafsa.gov is preventing applicants from using the IRS DRT when making corrections on these specific transactions. Due to data edits, applicants also may experience issues with navigation or submitting corrections on fafsa.gov if they attempt to correct student or parent financial fields on impacted transactions. Additionally, we have determined that the IRS Data Field Flag values are not updating correctly for student or parent financial fields on these affected transactions.

The issue of the IRS Request Flag 06 not updating correctly and preventing the IRS DRT from being used when making corrections occurs when a student or parent performs all the following actions on fafsa.gov:

Corrects a data element on a transaction that does not affect eligibility to use the IRS DRT (such as the student’s middle initial);

Corrects a data element that does affect IRS DRT eligibility (such as the student or parent Tax Return Filing Status, Parents’ Marital Status, or Student’s Marital Status Date);

Advances to a subsequent section of the application;

Backtracks to the field affecting IRS DRT eligibility and changes the value back to what it was originally on the transaction;

Submits the correction for processing.

For example, an independent applicant completes a FAFSA form on fafsa.gov and uses the IRS DRT to transfer her tax information into her FAFSA form and submits the application, creating the 01 transaction. The applicant begins a correction to change her mailing address and prior to submission, also changes her marital status date, making her ineligible to use the IRS DRT. She navigates off of that page, then prior to submission, changes her marital status date back to its original date and submits the correction for processing, resulting in an 02 transaction.

Workaround/Resolution:

We expect to have a correction in place by late January 2018. Until that time, applicants or parents who have encountered the situation described above as issue #2 and who need to make corrections or wish to use the IRS DRT should do so to an earlier transaction that does not have the student or parent IRS Request Flag of 06. When making corrections to the earlier transaction, applicants and parents should avoid correcting any field that would make them eligible to use the IRS DRT, including but not limited to Tax Return Filing Status, Parents’ Marital Status or Student’s Marital Status Date.

If other corrections had been made to subsequent transactions, those corrections should be reapplied to this earlier transaction. This will allow the correct IRS Request Flag to properly carry forward to the new transaction. Using the example from above, the workaround for the applicant would be to access the 01 transaction (which has the 02 IRS Request Flag), make a correction to her mailing address and then submit that correction. The resulting 03 ISIR transaction will have the appropriate 02 IRS Request Flag and properly set IRS Data Field Flags.

SCHOOLS MUST AUTHENTICATE IDENTITY OF FAFSA FILERS

Beginning with the 2018–2019 FAFSA cycle the IRS DRT will obscure a taxpayer’s information from a FAFSA applicant but ISIR data received by schools will have all of the information. Last month federal student aid issued a reminder to institutions that they are obligated to protect the security and confidentiality of data used in all aspects of administration of the Title IV Federal Student Aid programs. This includes having policies and practices in place that provide for adequate authentication of an applicant’s identity before disclosing any confidential information. Schools may not disclose income and tax information from the FAFSA with the applicant his or her spouse or parents unless they can authenticate their identity.

A FAFSA applicant appearing in person and presenting an unexpired, valid government issued photo identification (e.g. a driver’s license, non-driver’s identification card, other state issued identification, or U.S. passport) is a secure way of doing so for purposes of disclosing FAFSA information.

FSA cautioned institutions that while an institution may have policies and procedures in place that provide for authentication in a manner other than in person, or practices that guide staff interactions with students and families about how to answer questions from applicant’s and their families without compromising highly confidential information they may also need to strengthen their internal controls and provide additional training for staff to ensure that confidential information is not inappropriately or inadvertently disclosed.