I.R.S. Data Retrieval Process

Overview

Officials in the Office of Federal Student Aid and the Internal Revenue Service have worked together to develop a process to simplify the steps that families must take each year to complete the Free Application for Federal Student Aid ("FAFSA")

Federal Student Aid staff have redesigned the "FAFSA on the Web" site to simplify the application process for applicants.

This tutorial will introduce you to the new "IRS DATA RETRIEVAL TOOL" ("DRT")that is now available on the 2013-2014 Free Application for Federal Student  AID ("FAFSA") website.  We want to thank the staff at the University of California at Santa Barbara for sharing this with the financial aid community !

The Department of Education randomly selects a certain percentage of applications each year for  schools  to verify that the data provided on the  FAFSA application  is accurate.  Learn more about the verification process

How This Will Work on the 2013-2014 FAFSA

The "IRS Data Retrieval" process for the 2013-2014 academic year is tentatively scheduled to l be available sometime after February 3, 2013

• Electronically filed tax return information will be available online from the IRS site in 2-3 weeks after the return has been filed,
• Data from paper tax returns will be available in 6-8 weeks.

All 2013-2014 FAFSA On The Web applicants, and the parents of dependent applicants, who indicate that they have filed their federal tax returns prior to completing their FAFSA and who are otherwise eligible will be directed to use the FAFSA-IRS Data Retrieval process to complete their FAFSA more easily and accurately.

Applicants who chose not to use the FAFSA-IRS Data Retrieval process, or who retrieve IRS data but subsequently change it, will be informed that they will need to explain to their institutions why information they provided is more accurate than the information that would have been obtained directly from the IRS. They will need to provide information obtained directly from the IRS.

In general, all applicants who have already filed but elect to not use the retrieval process will be subject to being selected for verification based upon the risk they pose to federal funds and, if they are selected, will be required to support their reported FAFSA data with information obtained directly from the IRS.

Families must actively choose to utilize the data retrieval tool. If they choose to do so, they will be transferred to the Internal Revenue Service web site.

Applicants will need to authenticate their identity before any person information is displayed.

Tax data will be presented and the applicant will have the option to “Transfer” the tax information to the FAFSA. Applicants can also choose NOT to transfer the data to the FAFSA.

Transferred data will have a notation - “Transferred from the IRS"

Remember,

• Electronically filed tax return information will be available online from the IRS site in 2-3 weeks after the return has been filed,
• Data from paper tax returns will be available in 6-8 weeks.

FAFSA Corrections

 We know that many parents of our incoming undergraduate students will not have their federal tax returns completed by the priority application deadline of February 15, 2013. These families can use "estimated income" information on the initial FAFSA.  These families will be able to use this process once their tax returns are completed.

Using emails and other communications, starting around April 1, 2013, Federal Student Aid will remind applicants that once they have filed their income tax return they should use the FAFSA corrections process to update their FAFSA using the FAFSA-IRS Data Retrieval process. Subsequent messages will be sent every 45 days until mid-September then every 60 days until the end of the processing cycle.

• Click on the link in the middle of the page "Make FAFSA Corrections"

 Some Families Will Not Be Able to Use This Tool

• A married independent applicant and spouse who filed separate tax returns;
• When the parents of a dependent student filed separate tax returns.
• An applicant or applicant’s parent who have had a change in marital status after the end of the tax year on December 31, 2011.
• The applicant, or parent or spouse, as applicable, who have filed an amended tax return.
• The applicant or the applicant's parent and or spouse, as applicable, have an unpaid federal tax liability.

will not be able to use the "DRT". These families should contact our office for more information.

IMPORTANT NOTE: The FAFSA on the Web IRS Data Retrieval Process will only transfer information from an original tax return and not from an amended tax return.  Similarly, the IRS Tax Return Transcript only includes information from the original tax return.  While the IRS Tax Account Transcript, does include tax return items that were changed when an amended return was filed, it does not include all of the data that did not change.  Therefore, both an IRS Tax Return Transcript and an IRS Tax Account Transcript must be obtained from the IRS and submitted to a school for verification to be completed when an amended return was filed.  The IRS does provide another option for tax filers who filed an amended tax return – the Record of Account which includes the required information from both the IRS Tax Return Transcript and the IRS Tax Account Transcript.

• Request a Transcript

However, the Record of Account can only be requested using a paper IRS Form 4506-T and, as a paper request, it could take up to 30 days for the tax filer to receive the Record of Account, whereas the IRS Tax Return Transcript and IRS Tax Account Transcript can be requested electronically from the IRS or by phone, which for electronic filers will yield quicker results. 

In summary, when the school is aware that the student or the student’s  parent(s) or spouse, filed, or will file, an amended tax return with the IRS, it may obtain from the applicant both an IRS Tax Return Transcript and an IRS Tax Account Transcript and use the information from both transcripts to complete verification.  Alternatively, the tax filer could request a Record of Account from the IRS (using IRS Form 4506-T) and submit the Record of Account to the school.

Updated February 25, 2013