The Internal Revenue Service (“IRS”) has begun the process of updating the Income Verification Express Service (“IVES”) to a more modern system. To move from a manual process to a more efficient automated process, the IRS is implementing optical character recognition (“OCR”) software.
For form 4506-C, IVES Request for Transcript of Tax Return, submissions to be accepted by the optical reader, the form must be submitted as a “clean copy,” free of any notations or editing marks. Previously, it was common practice for the 4506-C form to be completed with multiple products and tax years but have the order request only include certain marked transcripts or years. Effective January 1, 2022, all 4506-C requests must include only the information needed for the order and be clear of editing marks. Only one transcript type should be included per form, and only the taxpayers and tax years needed should be included on the appropriate lines. Non-conforming orders will either be rejected by the IRS or the order will be charged for all marked items, resulting in additional fees.
One of the more significant changes comes in handling of persons filing joint tax returns. As of January 1, a 4506-C for joint tax returns should only include the name of one of the taxpayers in order to avoid duplicate fees for the second taxpayer.
Effective December 9, 2021, DocMagic will be making the following changes to the 4506-C to comply with IRS requirements:
- If requesting a 1040 for joint taxpayers, only one taxpayer’s form will be provided, as that is all that is required. Including both joint taxpayers will result in additional charges.
- Return a separate form for each tax transcript type being requested, with only one box checked in the corresponding line, 6A-6C or 7, for the tax transcript type.
Note, DocMagic will include all tax years being requested. Only the years needed should be included in the request, as the IRS will return all years on the request, which may result in additional fees.
For more information, click here to view the latest IRS bulletin regarding the changes. If you have any questions, please contact DocMagic's Compliance Department.