The removal of the IRS Data Retrieval Tool (IDRT) requires borrowers to take additional steps when dealing with their Income Driven Repayment (IDR) Plan. This article addresses how to navigate your IDR Plan without the IRS Data Retrieval Tool.
If you are a borrower desiring to enroll in an income-driven repayment (IDR) plan or recertify income (as required annually to remain in an IDR plan), you must verify your income using your most recent tax return. To simplify this process, the Internal Revenue Service created a tool known as the IRS Data Retrieval Tool (IDRT). This tool allows you to populate tax information into the required forms without having to get copies of tax returns. However, on March 9, 2017, the IRS announced the temporary removal of the IDRT. In the written statement, the IRS notes that the “online data tool will be unavailable for several weeks” due to “concerns that information from the tool could potentially be misused by identity thieves.”
Until the IRS restores the IDRT, you must provide tax information for enrollment and income certification forms manually. So now, instead of able to use the IDRT, you need to have a copy of your most recent tax return or tax transcript. If you used a tax service to file your return, that service generally will keep a copy of your most recent return. You can get a copy of your return by filing a Form 4506, “Request for Copy of Tax Return.” It is important to keep in mind that a Form 4506 requires a $50.00 payment and a processing period of up to 75 days.
To obtain a tax transcript via the IRS, go to its service, aptly named, “Get Transcript.” Online access to transcripts requires you to verify your identity through personal information including date of birth and Social Security Number as well as a mortgage or credit card account containing a personal account number. If you don’t have these materials immediately available, you can also request to have a transcript mailed to you by entering your Social Security Number, date of birth, and mailing address. You will receive a mailed transcript within 10 days. The Get Transcript service can be accessed here.
Once you locate either a transcript or tax return, you are ready to complete the income recertification form or IDR plan application. Here is the step-by-step:
1. Complete the application or recertification form at studentloans.gov.
2. Once submitted, provide your loan servicer with a copy of your recent tax return or transcript.
3. Your loan servicer will then combine the application and tax documents and submit the materials to the Department of Education for review.
4. Once the Department of Education received the application, you can expect to receive a decision within 60 days.
5. Once the decision has been made, the loan servicer will then provide you with either a payment schedule for the next 12 months or a request for further information.
It is best to allow 10-30 extra days when requesting a plan or certifying income due to the additional steps of (1) gathering your tax return or transcript and (2) sending those documents to the loan servicer. Borrowers recertifying their income should be on particular notice, as failure to recertify income often results in a monthly payment increase.
The lack of the ease of IDRT will likely frustrate many borrowers. However, with the appropriate planning and correct information, your income-driven repayment doesn’t have to suffer. Still have questions? Send me an email at studentdebt@equaljusticeworks.org for assistance. For further updates to changes in the IDRT tool, sign up for our email list.
Kenneth Strickland is the Student Debt Specialist at Equal Justice Works. He works to ensure that public interest legal jobs remain accessible to all who desire them by engaging in education, outreach, and policy analysis about maintaining affordable legal education. Ken graduated from the University of North Carolina School of Law and lives in Alexandria, VA in a tiny apartment with a cool dog.