Navigating IRS transcripts isn’t just about retrieving data – it’s about understanding what that data means and how it can help your clients. In a recent discussion, NATP instructor and tax resolution expert Jim Buttonow shared practical insights on using IRS transcripts more effectively in everyday practice. From recent changes in access to common red flags to watch for, here’s what you need to know.

Understanding IRS transcripts

IRS transcripts are essential tools for reviewing a taxpayer’s filing and payment history. They’re often used to verify returns, track notices, and uncover discrepancies that may lead to compliance issues or refund delays. As a refresher, here are the main types of transcripts:

• Tax return transcript – shows most line items from the original return
  • Available for current and prior three years
• Tax account transcript – includes basic data such as filing status, AGI, taxable income and any payments or adjustments
  • Available for current and prior nine years
• Record of account transcript – combines tax return and tax account transcript data
  • Available for current and prior three years
• Wage and income transcript – contains information from W-2s, 1099s, 1098s and other third-party statements
  • Available for current and prior nine years
• Verification of non-filing letter – confirms that no Form 1040-series return was filed for a given year
  • Available after June 15 for the current tax year and anytime for prior three years

Transcript Type	Description	Availability
Tax return transcript	Shows most line items from the original return	Current year and prior 3 years
Tax account transcript	Includes filing status, AGI, taxable income and any payments or adjustments	Current year and prior 9 years
Record of account transcript	Combines tax return and tax account transcript data	Current year and prior 3 years
Wage and income transcript	Contains W-2s, 1099s, 1098s and other third-party information	Current year and prior 9 years
Verification of non-filing letter	Confirms no Form 1040-series return was filed	After June 15 for current year; anytime for prior 3 years

What’s new for 2025

The IRS continues to modernize transcript tools and access, and this year, several changes are making transcript use easier – and more secure – for tax professionals.

• Redacted data for identity protection – Only partial Social Security numbers and other identifiers are shown, which helps protect taxpayer information.
• Improved online tools – The IRS is enhancing features in its Tax Pro Account and Transcript Delivery System, making it easier to pull the right records quickly.
• More real-time updates – Some data is now updated more frequently, giving you better visibility into the status of returns and notices.

Best practices for transcript use

Transcripts can be a powerful diagnostic tool – if you know how to use them well. Buttonow recommends these tips:

• Review wage and income transcripts early to detect income underreporting issues or overlooked documents
• Use tax account transcripts to help resolve notices related to penalties, payment mismatches or unfiled returns
• Regularly monitor your clients’ transcript data when handling IRS letters or suspected identity theft
• Encourage clients to create their own IRS Online Account for visibility – especially helpful for those dealing with identity theft or refund delays

  Why this matters

Understanding IRS transcripts is essential for proactive tax professionals. They can help you catch filing errors, resolve issues more efficiently and communicate more confidently with the IRS on your client’s behalf. Buttonow shared, “The transcript is often your window into what the IRS sees – and that’s the key to unlocking solutions.”

NATP members stay ahead of changes like these to better serve clients with accuracy, insight and professionalism. If you haven’t explored the latest on IRS transcripts, now’s the time to sharpen your skills.

👉 Watch the conversation with Jim Buttonow below!

Has a tax client ever told you, “You’re too expensive”? That’s a common fear when adjusting your fees during tax season. No one wants to hear clients tell them they’re too expensive.

Here’s how to overcome it:

1. Explore, don’t react

It can be offensive to hear a client tell you, “You’re expensive,” when you know how hard you work and how qualified you are to do the job. Use this opportunity explore what they’re expressing behind the words.

2. Remember, “expensive” is relative

A $1 million home to someone with a $1 billion in the bank can be “cheap.” Everyone defines what’s expensive to them based on their perspective. When someone says something is expensive, it usually means they don’t see or understand the value yet, or they’re comparing your service to something else.

3. Find the comparison

Here’s an easy response: “Our pricing is Dynamic based on our capacity and each client’s unique tax situation. Is there another service you’re comparing our prices to?”

The common comparisons are:

1. Do-it-yourself tax software

   “The online preparer assisting you may not know your tax history or your specific industry to maximize your available tax strategies. In many cases, they also can’t support you throughout the year after your filing.”

2. Other tax preparers in the area

   “The same tax forms for two different people can require wildly different levels of effort based on the firm’s workflow, experience and the complexity of your financial life.”

   A house cat and a mountain lion are related but are two different animals and can’t truly be compared. Similarly, it’s difficult to compare tax filings for two different clients, even if they’re using the same tax forms.

3. Advisory or tax planning packages vs. tax-only packages

   “Those are two different service levels with vastly different outcomes for you. Your taxes are filed either way, but if the price includes tax planning/advisory, it includes strategic help to reduce your taxes legally based on your unique qualifications.”
   If you compare a tax-only engagement with a tax advisory or planning engagement, this is another apples-to-oranges exercise.

4. Registered U.S. preparers vs. outsourced work

   “It can be practically difficult to have an ongoing dialog with someone based outside the U.S. in a different time zone. There also can be significant data, security or logistical considerations to understand when sending your data outside the country”.

We live in a globally connected world. A preparer outside the U.S. could be the perfect solution for some clients, but clients should at least understand the potential tradeoffs.

4. Identify progress

Once the client realizes that not all “tax fees” are created equal, ask them what progress they specifically want to make in their next filing.

Do they want to minimize their tax liability through legal tax strategies? Do they want someone to finally explain what their accounting numbers really mean and how to improve them? Do they want someone to use their numbers to help them make informed business decisions? Do they want someone to help maximize their retirement income in a tax-advantageous way? Or do they really just want the cheapest possible tax filing?

5. Give them options

At this point, if the client really wants help, you can give them two or three options for engaging with you this year and tie the options directly to the level of support they want and the progress they want to make.

Focusing the options on helping them make progress on the specific things they care about will ensure they see value in your pricing. The quote you give them will no longer be perceived as expensive.

This response framework is the key to positioning your value in the client’s mind. Without educating the client and connecting your fees to outcomes they care about, they will default to comparing you to whatever is easiest.

That’s fine. It’s not their job to know taxes in and out. It’s our job in the industry to educate clients and provide genuine help.

How much revenue could you add this year if you repositioned your value with just 10-50 clients? Start there and see your margins build. It will create a foundation for profitability in the long term.

Filing prior-year returns is more complicated than it looks, and taxpayers would benefit from the help of a qualified tax pro. During the 2025 tax season, taxpayers and tax professionals will file over 180 million individual and business income tax returns. Most tax filings will be for the 2024 tax year, but tax season is also a reminder to many taxpayers to “catch up with the IRS” if they have not filed all their required prior-year returns.

Each tax season, the IRS receives millions of prior years’ returns from taxpayers getting back into filing compliance with the IRS.

For many reasons, prior-year non-filers need a tax professional to help with filing an accurate return and dealing with potential IRS issues from late filing. 

First, the late filer likely needs prior-year tax knowledge, software and tax forms to file the back returns. Second, they may have to “rebuild” their old tax records and need a tax pro to help them obtain and sort out what is needed to file an accurate return. Lastly, they may fear the IRS and need to know if they are in trouble – especially if they owe on a prior unfiled year.

Tax pros can add their expertise and assistance through six critical actions that will help successfully prepare and file prior year returns:

1. Determine how many back years needed to file. IRS Policy Statement 5-133 generally defines “filing compliance” for individual taxpayers to be the current and past five years of returns. On Jan. 1, 2025, most individual taxpayers must file 2019-2024 returns to be considered “filing compliant” by the IRS. There are several exceptions to this rule, including business taxpayers. However, many taxpayers are very much unaware of this rule and overwhelm themselves (and potentially cause unneeded tax debt) by trying to file many returns that the IRS is not requiring or requesting. Tax pros can confirm what returns are unfiled to avoid filing more or less than what is required by the IRS.

2. Obtain information from the IRS to help file an accurate return. To identify many income sources, the tax pro can obtain the client’s IRS Wage and Income Transcripts, which report their information returns (W-2s, 1099s, etc.) to the IRS. This step helps the client rebuild their tax records, but it also helps avoid additional IRS scrutiny if the filed return does not match the IRS Wage and Income Transcripts. A discrepancy with the filed return versus IRS reported income information will likely result in IRS inquiries to the accuracy of the return. The IRS can also provide the tax pro any special filing instructions on the late return resulting from IRS non-filing enforcement. The tax pro can contact the IRS to determine if the IRS has started enforcement through the substitute for return process (where the IRS files a return for the taxpayer) or local enforcement. If enforcement exists, specific steps must be taken when filing the return with the IRS compliance unit.

3. Prepare and file returns, including e-filing if available. Using DIY software to file prior year returns can be very confusing to most taxpayers. In fact, most DIY tax software will not allow taxpayers to e-file prior year returns. Tax pros usually have prior year tax software and knowledge to file an accurate return. If no enforcement is present, they can also e-file the prior two years of returns. The tax pros can also use the unmasked IRS Wage and Income transcripts received from the IRS as a head start to matching the filed tax return with income reported to the IRS.

4. Confirm IRS acceptance of the prior year return. The common misconception is that once a return is filed, the IRS accepts it. This is especially not true for prior year returns. The IRS screens the returns or accuracy, matching it with the income reported to them for any discrepancies. They also match other items, like proper reporting of Marketplace health care coverage and credits. Prior year returns can also be flagged for potential identity theft or audit. Paper filed back returns can also take several months to process and accept, meaning you need to monitor the returns to acceptance. Tax pros can use transcripts and periodically contact the IRS (Practitioner Priority Service) for the status and reconcile any open issues.

5. Help with penalty relief. Balance-due, prior-year returns will incur failure to file and pay penalties. Tax pros can evaluate and request first-time penalty abatement or reasonable cause relief for the taxpayer and potentially save them from costly penalties.

6. Get into an agreement on any balance owed to avoid collection issues. Balance-due filers face the next step: how do I pay? To avoid IRS collection actions such as liens and levies, the taxpayer must pay the balance in full or get into a collection alternative such as an extension to pay, payment plan or a hardship alternative such as not collectible status or an offer in compromise. Here, tax pro involvement is essential to help the client evaluate their best options and avoid IRS enforcement actions.

Tax season always brings tax professionals opportunities to file back returns for clients. In the 2025 tax season, tax pros should see more prior-year filers than ever due to very low past non-filer enforcement. 

IRS data shows, from 2015-2019, it knew of more than 50 million individuals who had a filing requirement, but did not file a return. The IRS is also aware of tens of millions of unfiled business returns. The IRS is also aware that the non-filing tax gap is growing at an alarming rate. Last year, the IRS restarted non-filing notices, after several years of inactivity. With more enforcement and the growing number of non-filers, tax pros will be called on this season to help their clients with back-returns and get them back into good standing with the IRS.