Must a Student Provide Consent To Transfer Federal Tax Information If They Are a Victim Of IRS Tax-Related Identity Theft?

Yes. Beginning with the 2024-25 processing cycle, when completing the FAFSA, the student must provide consent for their federal tax information (FTI) to be transferred to the FAFSA via the FUTURE Act Direct Data Exchange (FA-DDX) even if that information may not be available to be transferred to the FAFSA. See the U.S. Department of Education's (ED's) Better FAFSA Better Future 2024-25 FAFSA Demonstration webinar transcript, Question/Answer 6: 

"Q6: I've had parents in the past not able to use direct import because their identity had been stolen in the past. Would that still be the case? If so, would they be ineligible for the FAFSA? Or is it enough to just provide consent even if that doesn't lead to direct import working as it normally would?

A6: Sure, good question. So, consent and approval to obtain the federal tax information or FTI must be provided by each contributor to the FAFSA form, and that is regardless of whether or not they filed taxes. Even if it's possible that federal tax information may not be successfully retrieved from the IRS, for example, if someone filed a foreign tax return or if their taxes have not yet been processed because they are victims of identity theft. Regardless of the situation, they must still consent and approve for the Department to use their information to request the FTI from the IRS. If the FTI is not successfully retrieved from the IRS, for whatever reason, for a contributor on the FAFSA, they will be able to enter the financial information manually to complete the FAFSA, but they still have to provide that consent and approval piece."

NASFAA suggests that the student complete the 2024-25 FAFSA and provide consent for FTI to be transferred. Based on the webinar Q&A, the student should be prompted to manually enter tax information. However, if that does not happen, once the Institutional Student Information Record (ISIR) is received by your school, you can resolve the conflicting information by manually entering the student's correct tax and income information from a signed copy of their tax return.