IRS Data Retrieval

1. IRS Data Retrieval December 6, 2011 Rick Renshaw US Department of Education

2. FAAs and Students Benefits • FAAs • Data provided through FAFSA-IRS Data Retrieval is acceptable documentation for verification of: • Adjusted Gross Income (AGI) • US Taxes Paid • Certain Untaxed Income items • Reduces administrative burden • Benefits for all • Increases accuracy • Reduces time investment • Reduce inaccurate payments in the Pell Grant Program by at least $340 million in the 2012 federal fiscal year

3. Who Is Eligible to Use? • Dependent and independent students • Parents of dependent applicants • Must be filing an initial FAFSA, renewal FAFSA, or correction to FAFSA • Must have a PIN • Required to access tax information on the IRS database • Required to sign the FAFSA online • No PIN, provided with the opportunity to apply for a PIN and use it immediately to transfer IRS data to the FAFSA and submit the FAFSA • Must have a valid Social Security Number (SSN) • Must have filed a prior year federal tax return • Marital status has not changed since December 31 of tax year

4. Who Is Not Eligible to Use? • Parents with all zeroes for SSN • Students using an 888, now 666, identifier in place of an SSN (i.e., students from the Pacific Islands) • Any student or parent who indicates they have not filed a tax return or will not file a tax return • Married couples who file separate tax returns • Marital status has changed since January 1 of application processing year • Amended returns

5. The values and descriptions for the Student and Parent IRS Request Flags are as follows: Blank - Not eligible for IRS data retrieval (i.e., paper FAFSA, EDE, or FAA Access) 00 - IRS data request for the parent/student was not submitted to IRS (i.e., parent/student was not presented with the option to use the IRS data retrieval process in FAFSA on the Web or chose not to use it) 01 - IRS data request for the parent/student sent to the IRS (i.e., parent/student was presented with the option to use the IRS data retrieval process in FAFSA on the Web, elected to go to the IRS Web site, but did not request the IRS to transfer data into the FAFSA on the Web application)02 - IRS data for the parent/student was returned from the IRS and was not changed by the user (i.e., parent/student was presented with the option to use the IRS data retrieval process in FAFSA on the Web, elected to go to the IRS Web site and transfer IRS data into the FAFSA on the Web application, and did not change IRS data once it was transferred)03 - IRS data for the parent/student was returned from IRS and was changed by the user (i.e., parent/student was presented with the option to use the IRS data retrieval process in FAFSA on the Web, elected to go to the IRS Web site and transfer IRS data into the FAFSA on the Web application, but changed the IRS data before the application was submitted) 04 - IRS data for the parent/student was returned from IRS and was corrected by the user (i.e., IRS data for the parent/student was transferred from the IRS, but it was changed by the user on a subsequent transaction) SSA Increased Numerical Range to Include 888 • Social Security Administration (SSA) implemented new guidelines on June 25, 2011 for assigning Social Security Numbers (SSNs) that include assigning SSNs in previously unused numeric ranges, such as 888 for ED’s pseudo-SSNs • Students assigned an SSN that falls within the previously unused numeric ranges may use their newly assigned pseudo-SSN to submit their applications starting Oct 23, 2011

6. Pacific Islander Students • When ED updated its systems on October 23, 2011, we converted all Pacific Islander records from the 2004-2005 cycle through the 2011-2012 cycle to a new pseudo-SSN range starting with "666" (instead of "888") • For all Pacific Islander records from the 2010-2011 and 2011-2012 cycles (submitted through October 23, 2011), we also system-generated new SAR/ISIR transactions for these students

7. Students Newly Assigned 888 • After June 25, 2011, students may be randomly assigned an SSN that begins with 888-XX-XXX • Pacific Island students submitting new 2011-2012 applications after October 23, 2011 should enter a pseudo-SSN beginning with “666” instead of “888.” • Students submitting corrections should use the “666” • Students from the Pacific Islands are not eligible for a PIN due to the lack of a SSN.

8. 12-13 Implementation • January 2012, all 2012-2013 FOTW 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 FAFSAs • 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 • If selected, will be required to support their reported FAFSA data with information obtained directly from the IRS

9. If IRS Data Retrieval Not Used • Applicants who chose not to use the FAFSA-IRS Data Retrieval process, or who retrieve IRS data but subsequently change it, 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 • Depending on their responses, may need to provide information obtained directly from the IRS

10. May Be Subject to Verification • Applicants should use the FAFSA on-line corrections process to access their IRS information using the FAFSA-IRS Data Retrieval process and update their FAFSA data • FSA will remind applicants using emails and other communications • Applicants who did not use the FAFSA-IRS Data Retrieval process, as well as those applicants who were not eligible to use the process, will be subject to the usual verification selection process • These applicants will need to work with their institutions to complete verification. The simplest way to do so is to use the FAFSA-IRS Data Retrieval process

11. 12-13 Items for Verification Adjusted Gross Income (AGI) U.S. income tax paid Untaxed Income - only the following untaxed income if reported on the 2012-2013 FAFSA - Untaxed IRA distributions Untaxed pensions Education credits IRA deductions Tax exempt interest

12. Start with FAFSA on the Web

13. …One Log-In for all Applicants

30. IRS Data Retrieval Tool • Tentative - February 1st deployment for 2012-2013 • 2011-2012 FAFSA on the Web relies on the applicant’s determination of whether the IRS DRT should be used • 2012-2013 FAFSA on the Web will include logic to make the determination for the applicant • Link will or will not be displayed

31. Income Estimator Notifications • After the April 15th IRS tax filing deadline, students and/or parents will receive e-mail reminders to update the student’s FAFSA with filed tax information • Messages encourage the use of the IRS DRT if the option is available in FAFSA on the Web

32. Eligible Filer Notifications • Students and parents who were eligible to use the IRS DRT but didn’t will receive an e-mail notification encouraging them to return to FAFSA on the Web and use the tool • E-mails will be sent beginning on April 1, 2012, with subsequent messages sent every 45 days until mid-September, and then every 60 days until the end of the cycle • E-mails will only be sent once per student/parent

33. IRS Request Flags • Student IRS Request Flag • Parent IRS Request Flag • Displays • if applicant eligible for the IRS data retrieval process • if data was retrieved from the IRS • if the data from IRS was modified • Deleted Reject P; CPS no longer edits the Social Security Number (SSN) as a result of changes in the way the Social Security Administration (SSA) assigns SSNs

34. 11-12 Updated IRS Codes • 00 - Student/Parent was ineligible to use the IRS Data Retrieval Tool and was therefore not presented with the option to use it in FAFSA on the Web • 01 - Student/Parent was presented with the option to use the IRS Data Retrieval Tool in FAFSA on the Web and elected to use it, but did not transfer IRS data into the FAFSA • 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 • 03 - IRS data for the student/parent was transferred from the IRS and changed by the user prior to submission of an application or correction

35. 11-12 Updated IRS Codes • 04 = IRS data for the student/parent was transferred from the IRS and then changed by the user on a subsequent transaction • 05 = Student/parent was presented with the option to use the IRS Data Retrieval Tool in FAFSA on the Web, but did not elect to use it. Added 8/2011 • 06 = IRS data for the student was transferred from the IRS, but a subsequent change made the student/parent ineligible to use the IRS Data Retrieval Tool Added 8/2011 • blank = IRS Data Retrieval Tool not available in the application method utilized by the student/parent (i.e., paper FAFSA, EDE, or FAA Access)

36. 12-13 IRS Codes Blank - IRS Data Retrieval Tool not available in the application method utilized by the student (for example, paper FAFSA, EDE, or FAA Access to CPS Online) 00 - Not eligible to use the IRS Data Retrieval Tool and was therefore not presented with the option to use it in FAFSA on the Web 01 - Presented with the option to use the IRS Data Retrieval Tool in FAFSA on the Web and elected to use it, but did not transfer IRS data into the FAFSA 02 - IRS data was transferred from the IRS and was not changed by the user prior to submission of an application or correction

37. 12-13 IRS Codes 03 - IRS data was transferred from the IRS and changed by the user prior to submission of an application or correction 04 - IRS data was transferred from the IRS and then changed by the user on a subsequent transaction 05 - Presented with the option to use the IRS Data Retrieval Tool in FAFSA on the Web, but did not elect to use it 06 - IRS data was transferred from the IRS, but a subsequent change made

38. Verification Tool • For 12-13 - The verification tool in FAA Access to CPS online will be disabled

39. Tax Transcript • http://irs.gov • Free • Available for current and past three years • Line items for • 1040 • 1040A • 1040 EZ • Accompanying forms

40. Ordering an IRS Account Transcript—Three Methods

41. Ordering an IRS Account Transcript Online (Steps 1-3)

42. Ordering an IRS Account Transcript online (Steps 4-6)