IRS takes down student financial aid data retrieval tool

The IRS alerted taxpayers that it has taken down its tool for retrieving tax return data used to complete the Free Application for Federal Student Aid (FAFSA), and the retrieval tool will not be operating for several weeks.

The data retrieval tool, which resides on fafsa.gov and StudentLoans.gov, normally allows individual taxpayers who are applying for student financial aid to complete the parts of FAFSA requiring tax return information online by accessing data from a prior year’s return and populating the FAFSA with that information. The IRS announced that the outage also affects taxpayers’ ability to access those data when applying for income-driven repayment plans for student loans.

The IRS said it shut down the system out of concern over the risk of identity theft from unauthorized users who may be able to access taxpayer return information using the data retrieval tool. Once these concerns are addressed, the IRS said it will reopen the system.

Meanwhile, the online FAFSA application and income-driven repayment plan applications remain operational. To get tax return information for the FAFSA application, which this year requires information from 2015 tax returns, taxpayers who do not have copies of those returns should try to get a copy of their return by accessing the tax software they used to prepare it, or, if they used a tax professional, they should contact the preparer and ask for the information.

Taxpayers can also use the Get Transcript online application but should review the rigorous identification and registration procedures before using that method. Taxpayers can also request a transcript by mail or by phone.

Income-driven repayment programs for student loans require borrowers to submit “alternative documentation” of their income, which refers to their most recently filed tax returns or pay stubs.

 —Sally P. Schreiber (Sally.Schreiber@aicpa-cima.com) is a Tax Adviser senior editor.