IRS Data Retrieval Outage to Last Weeks, Causes Access, Verification Problems

By Allie Bidwell, Communications Staff

The IRS Data Retrieval Tool, which allows students and parents to transfer tax information directly to the FAFSA, has now been nonfunctional for about a week, and will continue to be down for "several weeks," according to officials. And as the IRS and the Department of Education (ED) work to resolve the situation – with no set timeline – higher education stakeholders are raising concerns about the implications for students, parents, and financial aid offices.

ED confirmed to NASFAA earlier this week that it had learned of the outage late last week, and said the tool went down due to “technical issues.” The IRS and ED’s Office of Federal Student Aid (FSA) on Thursday released a joint statement, posted on Twitter by Inside Higher Ed’s Andrew Kreighbaum, for the first time publicly acknowledging the issue, and instructing applicants to manually enter information from their 2015 tax returns. The agencies also instructed applicants who do not have copies of their tax returns to request transcripts from the IRS.

Late Thursday, the IRS and ED again issued a joint statement saying the tool will be unavailable for several weeks, and that the IRS decided to “temporarily suspend” the tool due to concerns over identity theft.

“As part of a wider, ongoing effort at the IRS to protect the security of data, the IRS decided to temporarily suspend the Data Retrieval Tool (DRT) as a precautionary step following concerns that information from the tool could potentially be misused by identity thieves,” the statement said. “At this point, we believe the issue is relatively isolated, and no additional action is needed by taxpayers or people using these applications. The IRS and FSA are actively working on a way to further strengthen the security of information provided by the DRT. We will provide additional information when we have a specific timeframe for returning the DRT or other details to share.”

Despite the prolonged outage, FSA’s social media accounts have been directing applicants, particularly those in states with upcoming deadlines, to fill out the FAFSA, without acknowledging that the tool is not functioning. Until late Thursday, still directed applicants to use the DRT, but the website was updated and now states that the tool is currently unavailable.

“We understand that legitimate security concerns cited by ED and the IRS may have led to the tool being disabled and there will be time in the future to investigate how this issue could have been avoided," NASFAA President Justin Draeger said in a statement issued Thursday evening. "But in the meantime, we call on the Department of Education to take immediate steps to ease application and verification burdens that will fall squarely on students, potentially delaying or complicating their application process, not to mention increasing work on college campuses that could lead to delays and backlogs."

NASFAA's statement listed immediate steps that should be taken by the Department of Education, including:

  1. Updating and correcting FAFSA information and instructions across federal websites regarding the availability of the IRS DRT. We are pleased to see this has already begun.
  2. Allowing signed copies of tax returns from applicants to satisfy verification documentation requirements in place of Data Retrieval Tool information or IRS tax transcripts.
  3. Revising the verification selection criteria to provide a more generous tolerance to ensure that the numbers of students selected for verification remains stable and manageable by institutions so that financial aid processing can continue uninterrupted.

"We appreciate the federal government’s commitment to protecting student privacy and data and look forward to working with them to mitigate the negative effect this prolonged service interruption will have on students and families," Draeger said.

And as the situation remains unresolved, state financial aid deadlines that depend on information from the FAFSA are quickly approaching, potentially causing unforeseen problems for many applicants. Indiana’s deadline, for example, is Friday March 10, and Texas’s deadline is Wednesday March 15. At least 12 other states have various financial aid deadlines between now and May 1.

While students can still technically complete the FAFSA, the process without the DRT is much more complicated. According to Carrie Warick – director of policy and advocacy for the National College Access Network (NCAN), an organization that specifically focuses on underrepresented college-going populations – students who do not use the DRT to complete their FAFSAs are more likely to be selected for verification, which can take an additional two weeks, and possibly delay their financial aid packages. Additionally, if students do not have access to a copy of their tax returns and cannot get a tax transcript online, it can take up to 10 days to get one in the mail, Warick said.

Getting a tax transcript online can be problematic for low- or moderate-income families, Warick said, due to the requirements for verifying identities.

“You have to have a tremendous number of things to get a tax transcript online,” she said.

In order to confirm identity, students and parents must provide information for a credit card, mortgage number, home equity number, or auto loan number, in addition to other information such as an exact tax filing address, Social Security Number, an email address, and a mobile phone number with an account in his or her name. Warick said she attempted to request her own tax transcript online several times and was unable to do so.

“It’s very likely that a low- or moderate-income family pays rent, uses public transportation, and only has a debit card,” Warick said.

The DRT outage could also be troublesome for the FAFSA simplification movement, as well as the use of prior-prior year (PPY) income data.

Proposals that put forward new ideas for further FAFSA simplification – from both NCAN and NASFAA – also depend on expanding the information transferred from the DRT.

“This makes it difficult to see whether Early FAFSA had an impact, because you’re now taking away one of the benefits of the data retrieval option,” Warick said. “And if the DRT is not available, that could make other [simplification] efforts far more difficult to implement.”

As the outage continues, some members of Congress have begun taking notice.

On Thursday morning, Sen. Michael Bennet (D-CO) – who sits on the Senate Health, Education, Labor, and Pensions (HELP) Committee – tweeted to ED and Education Secretary Betsy DeVos, saying the DRT “needs to be fixed immediately.”

“It simplifies process & saves time for students, families, & borrowers,” the tweet said.

Rep. Lloyd Doggett (D-TX) – a member of the House Committee on Ways & Means – on Thursday sent a letter to DeVos and IRS Commissioner John Koskinen saying the outage is “unacceptable,” noting that with the approaching Texas state deadline, “it is imperative that the tool be fixed immediately.”

“Families depend on it to obtain immediate, accurate access to tax information from prior years,” he wrote. “Without it, they are more likely to have errors on their FAFSA, which could result in a full or partial loss of deserved aid. Many families who rely on state and federal aid do not have immediate or easy access to their tax information without this tool; the assumption that these families can complete the FAFSA manually by the deadline without using the DRT is inaccurate.”

Doggett went on to ask ED and the IRS to restore the tool to “full functionality” immediately, notify student and families of a timeline for the restoration, and work with higher education institutions with upcoming deadlines “to ensure that students and families will not be penalized for technical problems that are not their fault.”


Publication Date: 3/9/2017

Donna F | 3/13/2017 9:42:29 AM

Correction to my comment-having the student manually enter the data will cause inconsistency in data and thus more 399 codes.

Donna F | 3/13/2017 9:40:37 AM

Due to this unforeseen situation the DOE should make a one time exception and just transfer over last years financial data from the FAFSA for renewal students. This will probably cause more inconsistency in information from one application year to the next and more 399 codes. This has already been a nightmare to students.

Tracy H | 3/10/2017 12:48:54 PM

It's hard to put into words how challenging the FAFSA process has become. Efforts to "simplify" financial aid for families has done the exact opposite.
Why shouldn't we point the finger at DOE? While they didn't bring down the DRT, they should have made schools, students, and families aware the moment it happened...certainly not weeks AFTER it happened, and only after they got caught!
And they should be putting in place work arounds that actually WORK for families. Requesting a tax transcript has become so difficult, it places a barrier in front of our most vulnerable and at-risk students.
THANK YOU, NASFAA! For always having our backs and supporting and advocating for schools and our students!

Aesha W | 3/10/2017 11:35:11 AM

My initial thoughts were the same as Rob's. If there's a concern about a breach or something, it's understandable that it may need to be shut down. But why would you shut it down and then... hope no one noticed?

I also wondered the same thing as David. What about the FAFSA or the DRT itself is vulnerable to identity theft? FSA established the new ID system, which makes it pretty difficult for students/parents trying to complete a FAFSA, so FSA's security has been beefed up quite a bit. What's the bug with these two very difficult to nearly impossible systems to use that makes DRT such a high point of vulnerability?

Glad NASFAA is on the case and pushing for answers and a resolution to this issue.

Janice D | 3/10/2017 10:10:01 AM

I have been in Financial Aid for many years, but in the past few years several new regulations have made our work very frustrating. First it was the PIN that was supposed to be the answer to security and we all know that wasn't true. Then we went with the FSA ID, which has been and continues to be a nightmare for many. Now we have identity theft with regard to the IRS DRT. WOW! One cannot print an IRS Tax Return Transcript without providing information that identity thieves would be very grateful to know. And for 17-18, we tell every student "we don't believe you when you indicate you did not file. Here's a 4506-T form that you need to complete and mail to the IRS so that your non-filing status can be confirmed." Really? Right now and ongoing let us request copies of the actual federal income tax forms so we can complete the verification process in a timely and safe manner. Let us do our jobs!

Joseph K | 3/10/2017 9:34:20 AM

"...and that the IRS decided to “temporarily suspend” the tool due to concerns over identity theft."

Let's not lose sight of this and point fingers at the Dept. of ED.
This article indicates the "IRS decided."

Every year the IRS has attacks on the Treasury by identity thieves trying to steal people's tax refunds. And they work hard to stop this.

But I don't see how access to 2015 IRS data would be of any use to a hacker in 2017. Those 2015 returns are already filed, and the refunds are already spent. Common sense would dictate that the IRS needs to leave the DRT available to access 2015 tax information for students and families to use to file their FAFSA forms.

If the IRS "has concerns" - they need to focus on deterring identity thieves from using fraud to claim 2016 refunds - 2016 refunds and returns -2016. That is the year to "have concerns" over. Focus, IRS, focus!

Firewall the 2015 IRS DRT database and keep it going separately from other years. Honestly, this isn't that difficult.

Lisa C | 3/10/2017 8:45:39 AM

Lisa C I have son's in college and have already used DRT a month ago. How can we tell families this is safe to do even when it is up and running? I wouldn't want to use it myself. The Department of Ed needs to allow copies of tax returns and get rid of the non-tax filing requirement. We keep being told these decisions are to ease the burden on families, sorry but that point of view is ridiculous with the current verification process and data being breached from the IRS is inexcusable.

David S | 3/10/2017 8:38:24 AM

Troubling, to put it mildly. What I have not seen yet is an explanation from either the IRS or ED as to why DRT heightens the risk of ID theft. Both the FAFSA and tax documents are filled with SSN's, that's nothing new, and is unavoidable. People who know a lot more about cybersecurity than I ever will have presumably put measures in place to minimize it. Please don't make me go into political conspiracy theory mode here, Betsy.

Thank you, Justin and everyone else at NASFAA, NCAN and everyone committed to access for turning up the heat. We need frequent updates from ED.

And #IRSDRT is trending on Twitter... 😒

Rob W | 3/10/2017 8:35:38 AM

I understand the reasons and appreciate the concern over identity theft, but what I can't get over is that the IRS did not give anyone advance warning that they were going to shut the DRT down. At least we wouldn't have been blindsided.

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