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Project 01188

IRS Tax Account Transcripts

Project Statement:

Tax professionals.

Goal Statement:

The Office of Online Services (OLS) previously engaged with TAP on the topic of taxpayer requested data, focusing specifically on taxpayers’ struggles with interpretation of the IRS’s tax account transcript. As a follow-up to the incredibly valuable feedback TAP provided about taxpayers’ perspectives, our team would also like to ensure that we are considering the perspective of tax professionals as we consider updates to make to improve the readability and understandability of the transcript. For example, a non-expert taxpayer likely does not understand what the transaction codes mean, or what “cycle” refers to, or why some transactions show values of $0 – but are those transcript elements valuable to tax professionals? If yes, how might the IRS better accommodate the disparity in expertise between taxpayers and tax professionals in its transcript products? We want to ensure that any updates we make will meet the needs of all potential users (or find a suitable compromise), rather than serving the needs of one group (e.g., taxpayers) at the expense of another (e.g., tax professionals).

TAC Improvements Committee

Year: 2025


Status: Elevated

RECOMMENDATION 01188-001

RECOMMENDATION TEXT:

Provide more clarity to the codes and simple descriptions on the transcript(s). There used to be an on-line “pocket guide” with transcript codes that was helpful, but has either been eliminated or is no longer easy to find. Perhaps this could be accomplished through an Making transcripts clearer and easier to understand helps users to better understand the transcripts. The guide could include definitions of certain terms and explanations or examples for how entries function on the transcript.electronic link that opens a PDF file. An additional improvement would be to have the description of the code be more specific to the taxpayer. For example, instead of Code 570 — “additional account action pending,”, say “account on hold pending review of XXX”

IRS Action: Recommended

RECOMMENDATION 01188-002

RECOMMENDATION TEXT:

Where there is a code that has a relevant notice that explained a change, provide an electronic link to the notice. For example, Code 290 that says “There has been a change to your account”, please provide a link to the notice explaining the change. This suggestion presumes the user is logged on to the account and has generated the transcript electronically. If the transcript is a paper document, refer them to the letter that was sent explaining the change. Many users do not realize there is a related letter that explains the change or cannot find the letter.

IRS Action: Recommended

RECOMMENDATION 01188-003

RECOMMENDATION TEXT:

Eliminate unnecessary $0.00 entries. For example, where there is a code and description without a relevant monetary amount, do not print $0.00. In the return transcript, only print the relevant lines of the return that was filed. For example, on a return that does not claim the EITC, do not print “Schedule EIC Self-employment Income per computer”. This change will enable the user to clearly relate their filed return to the transcript and reduce unnecessary paper costs for mailed transcripts.

IRS Action: Recommended

RECOMMENDATION 01188-004

RECOMMENDATION TEXT:

With respect to the Wage & Income Transcript, do not redact the employer information (EIN, Name, & Address). This information is required to e-file a return. We agree the Taxpayer ID Number (social security number) should remain redacted. For taxpayers who are missing documents, practitioners request a taxpayer to obtain these transcripts. The taxpayer can request an “unredacted” transcript that contains the information, but if they simply request a W&I transcript, it does not contain the information required to e-file. Since the information is semi-publicly available (on W2s and 1099s), the taxpayer can get it upon request, and the purpose for requesting the information is usually to file a return, an unredacted transcript should be the default document. Even though they requested an unredacted transcript, the social security number should remain masked.

IRS Action: Recommended