Your 2-Minute Brief on the IRS Suspension of the Data Retrieval Tool

The IRS Data Retrieval Tool (DRT) found on fafsa.gov and StudentLoans.gov is currently unavailable and will be for several weeks. This temporary shut down is part of the IRS' effort to protect taxpayers from identity theft and reduce tax return fraud. The tool will remain unavailable until all security concerns are resolved.

This temporary shut down is part of the IRS' effort to protect taxpayers from identity theft and reduce tax return fraud.

How Does the DRT Work?

The DRT allows taxpayers who apply for financial aid to complete their FAFSA more efficiently. The tool accesses a taxpayer's information from a prior year's tax return and populates the corresponding sections of the FAFSA, reducing the amount of information that information has to be entered manually.

The DRT allows taxpayers who apply for financial aid to complete their FAFSA more efficiently.

Justin Draeger, president and CEO of the National Association of Student Financial Aid Administrators, said that since 2010 the DRT has "helped reduce application errors for millions of financial aid applicants, while at the same time reducing the number of complex and time-intensive income questions on the FAFSA."

Normally, use of the tool is highly encouraged by universities and the Department of Education.

Why Take the DRT Down Now?

Tax return fraud has escalated in the past few years, and the IRS has been making efforts to combat it. These increased efforts led to a 50% decrease in identity theft from 2015 to 2016. Some of the 2017 identity fraud prevention efforts have included more thoroughly reviewing returns that claim certain tax credits, asking taxpayers to provide additional proof of identification, securing electronic tax software, and now, suspending use of the DRT.

Because the DRT pulls personal taxpayer information, the IRS and the Department of Education want to ensure that the tool isn't vulnerable to being hacked and misused by the wrong people. As of now, both entities believe the issues that caused the DRT suspension are isolated and that taxpayers who used the tool don't need to take any additional actions to protect their identities. The full statement by the IRS and Department of Education is available here.

Tax return fraud has escalated in the past few years, and the IRS has been making efforts to combat it.

How Will the DRT Suspension Affect Financial Aid?

Students can still apply for financial aid with the DRT, they will just have to manually fill out the required tax return information and double check that the information is correct to avoid complications. Students can find the necessary information on their last tax return. To obtain a copy of their return, students can access the tax software they used to prepare it, contact their tax preparer, use Get Transcript Online, or call 1-800-908-9946.  Draeger suggests that students who need assistance filling out their FAFSA visit their college's financial aid office.

The DRT suspension will likely not affect any student's chance at getting awarded financial aid. The Department of Education and colleges are aware of the issue and will likely make accommodations to help resolve any issues that are a result of the temporary DRT suspension.

Want to learn how you can help crack down on tax return fraud? Check out How to Use IRS Transcripts to Detect Identity Fraud.