Franklin & Marshall College Franklin & Marshall College

Financial Aid

Federal Verification and IRS Data Retrieval Tool

The Department of Education randomly selects certain FAFSA records for a process called Federal Verification. When a FAFSA is selected, there are additional financial aid requirements necessary to confirm your financial aid eligibility. A message included in your FAFSA confirmation report (the SAR or Student Aid Report) will inform you of your selection for this process. To satisfy the Federal Verification process, students and parents who filed a federal tax return must either use the IRS Data Retrieval Tool (preferred) or submit an IRS Tax Return Transcript to the Office of Financial Aid. Instructions on both these steps is below. Please note, that even though you may have already submitted signed copies of federal tax returns, the requirement of the IRS Data Retrieval or tax transcript tool is still necessary when selected for Federal Verification.

This process is required of both the parents and students when they have filed federal tax returns.

Students and parents who file their IRS federal income tax returns are encouraged to select the IRS Data Retrieval Tool option on the Free Application for Federal Student Aid (FAFSA) to transfer their tax information electronically to the FAFSA.  This option will streamline and expedite the processing of your financial aid application.  This option is available during the initial filing or when subsequent corrections are made to your FAFSA.

To successfully use the IRS Data Retrieval Tool option you must:
  • Have a federal tax return filed with the IRS.
  • Have a valid social security number.
  • Have a Federal Aid Personal Identification Number (PIN)

Follow the following steps:

  1. Go to the FAFSA website (www.fafsa.ed.gov)
  2. Select Make FAFSA Corrections
  3. Navigate to the Financial Information section
  4. Select already completed from the parent (and if student filed the student also) drop-down box and choose the appropriate response
  5. Enter your PIN and click Link To IRS
  6. Your FAFSA will be saved and you will be transferred to the IRS Web site.
  7. On the IRS Web site, enter the requested information.
  8. Once the IRS has validated your identification, your IRS tax information will display. You can either transfer your information from the IRS, or choose to return to FAFSA on the Web from the IRS Web site. If you do not transfer your information or choose not to return from the IRS Web site, you will have to login to open your saved FAFSA.
  9. If you transfer your IRS tax information, questions that are populated with tax information will be marked with “Transferred from the IRS.”

You will be unable to use this option if:

  • Your marital status changed after December 31, 2011.
  • You filed married filing separately.
  • You filed an amended return.  (See bottom of page for more information.)
  • You filed a foreign tax return.
  • You filed a tax return using a Tax ID Number (TIN).
  • The home address on the FAFSA does not match the address on the tax return.

According to the IRS, this tool cannot be used until 1-2 weeks after electronically filing a tax return and 6-8 weeks after filing paper tax returns.

*Please note that signed copies of your 2012 federal tax returns, along with all schedules and W-2 forms, still must be submitted via IDOC as part of the financial aid application process if you have not already done so.

How It Works

When either a parent or student selects the IRS Data Retrieval option, the FAFSA Central Processing System (CPS) will conduct a data match with the IRS. As the federal income tax filer, you will be redirected to a secure IRS website, where you will permit the IRS to transfer income data to the CPS. Data that is successfully matched will be marked on the FAFSA with the following notation, “Transferred from the IRS.” It’s as simple as that. This process avoids reporting errors and processing delays that can otherwise occur when the option is not selected.

Obtaining a Tax Return Transcript from the IRS

If your FAFSA is selected for Verification, and you are unable to use the IRS Data Retrieval option, or you changed the IRS data, you will be required to request a Tax Return Transcript from the IRS, and submit it to the Office of Financial Aid (separately from your federal tax returns submitted as part of F&M’s regular financial aid application process).

There are three ways to request your Tax Return Transcript by phone, online, or by mail. Please make sure you request a Tax Return Transcript. 

A Tax Return Transcript can be ordered by phone. Follow the options listed below:

  • Call the IRS at 1-800-908-9946 (7:00 a.m. to 10:00 p.m.)
  • Tax filers must follow prompts to enter their Social Security Number and the numbers in their street address. Generally, these will be the numbers of the street address that was listed on the latest tax return filed. However, if an address change has been completed through the U.S. Postal Service, the IRS may have the updated address on file.
  • Select “Option 2” to request an IRS Tax Return Transcript, and then enter “2012”
  • If successfully validated, tax filers can expect to receive a paper IRS Tax Return Transcript at the address that was used in their telephone request within 5 to 10 days from the time the IRS receives the request.
  • IRS Tax Return Transcripts requested by telephone cannot be sent directly to a third party by the IRS.

A Tax Return Transcript can be ordered online. Follow the options listed below:

  • Go to www.irs.gov
  • Click Order a Tax Return or Account Transcript located under Tools.
  • Click Order a Transcript under Step 3
  • Enter your SSN, Date of Birth, Street Address, and Zip Code
  • Click Continue
  • Select Return Transcript for Tax Year (i.e. 2012)
  • Click Continue

A Tax Return Transcript can be ordered by mail. Follow the options listed below:

  • Complete Form 4506-TEZ (Request for Transcript of Tax Return)
  • Form 4506-T is available online here www.irs.gov/pub/irs-pdf/f4506tez.pdf.
  • Mail or fax the completed IRS Form to the appropriate address (or fax number) provided on page 2 of Form 4506T-EZ.
  • Your transcript(s) will be mailed within 5 to 10 days from the IRS.

If you amended your originally filed federal tax return with the IRS:

Obtain a Tax RETURN Transcrips, which will show your information as originally filed.
 

Obtain also a Tax ACCOUNT Transcript, which will show the changes made by amending your return.  

Both of these forms are required for federal verification purposes, if you amended your federal tax return.