The Internal Revenue Service Data Retrieval Tool (IRS DRT) was suspended on March 3, with Federal Student Aid (FSA) and IRS citing security and privacy concerns. On May 3, the House Committee on Oversight and Government Reform held a hearing to get a better understanding of the problems that caused the tool to be taken out of service and the steps FSA and the IRS are taking to restore this critical tool.
James Runcie, the Chief Operating Officer of the office of Federal Student Aid (FSA), confirmed that the DRT will continue to be suspended for 2017-2018 FAFSA; it will return Oct. 1, 2017 for the 2018-2019 FAFSA. This solution, according to a memo from FSA, will “limit the information that displays to the applicant” to enhance security. Taxpayer information will be encrypted and hidden from view on both the IRS DRT page and the FASFA page.
Gina Garza, chief information officer of the IRS, testified that the highest priority for the IRS is protecting Americans from tax fraud. The decision to suspend the IRS DRT came only after there was confirmation of suspicious activity and fraudulent returns filed using the DRT. Garza also explained that data-sharing between two agencies is rare, so conflicting priorities — the Department of Education’s focus on students and borrowers, and the IRS’ focus on taxpayers — have contributed to lack of clarity regarding appropriate action.
US Representative Virginia Foxx, (R, North Carolina), a committee member who also chairs the House Education and the Workforce Committee, asked each official to confirm that the security concerns will be resolved when the DRT is reinstated. Officials from the Department of Education confirmed yes, while officials from the IRS said they were unsure. A leader with the Inspector General of the Tax Administration Investigations division noted that the office would closely monitor the DRT for fraudulent activity.
Officials from the Department of Education noted that about 10 million FAFSA filers use the DRT annually (roughly 20 million individuals file every year), and this year FSA saw a 7 percent drop in the number of students selected for income verification. There are worries that without the DRT, the number of students selected for verification is likely to increase.
The DRT outage affects all students seeking financial aid for 2017-18, and many students have yet to file the FAFSA. Professionals supporting students as they file the FAFSA should continue to seek information and encourage students use alternative methods of income verification.
FSA wants to make it clear that students can still complete the FAFSA without the IRS DRT by manually entering tax return information.
NACAC will continue to monitor the issue and provide updates as appropriate. You can watch the full committee hearing here.
Liz Glaser is NACAC’s government relations manager. She can be reached at lglaser@nacacnet.org.