Clarity’s New Enhanced Tax Verification Process Home

I’m pleased to share that we have a new pathway for families to complete our Enhanced Tax Verification (ETV) process, all directly within the Clarity app. Families will have the opportunity to choose to take advantage of the IRS.gov path, but it will no longer be required. This enhancement is based on our learnings from recent months: while the current iteration of ETV has been effective for most families, some expressed discomfort with the IRS.gov account requirement.

By introducing this additional pathway, we aim to reduce friction in the process and ensure that families can choose the approach best suited to their circumstances. We remain committed to refining the tax verification experience in collaboration with our school partners and informed by the feedback we receive from both schools and families.

For background, a couple months ago, we announced the rollout of our Enhanced Tax Verification (ETV) process. The big change this iteration of ETV introduced was that instead of signing a form and waiting for someone at the IRS to review it, families would be directed to log in to their IRS.gov account and authorize the release of their transcripts directly.

In the blog post we released at the time, I ended by saying this:

Ultimately our goal is to deliver the best possible tax verification experience for you and your families and I’m confident this is a significant step in that direction. That being said, we’ll remain nimble and open-minded to making changes based on the feedback you and your families provide.

Two months later, we have now seen many thousands of families successfully complete the ETV process through IRS.gov. For those families, schools are receiving transcripts back minutes after they submit their application, and for the next three years, those families won’t have to do anything related to tax verification when they reapply. In general, the rollout has gone very smoothly.

In the new version of ETV, all families will sign Form 8821 and then they will be presented with a choice on whether to do identity verification with Clarity directly within the application or log into their IRS.gov account and authorize the release of their transcripts. Identity verification is a one-time requirement and regardless of which path a family chooses, they will be authorizing 3 years of taxes, which means they will not have to do anything related to tax verification for 3 years.

The biggest risk with form-based 8821 is the turnaround times. Last year, we saw turnaround times of multiple weeks (at certain parts of the year) for Form 8821, which is one of the primary reasons we preferred having families authorize the release of their own transcripts. That being said, as of today, turnaround times have come down significantly on form 8821, to the point where it’s actually performing better than our legacy form-based 4506c system. Should we experience any unacceptable delays with the 8821 path, we can easily reroute those requests through our legacy 4506c system without the need for families to take additional action.

We anticipate rolling out this new version of ETV where families choose their tax verification pathway in the next few weeks. In the meantime, as of today, all families will go through the form-based 8821 process instead of the IRS.gov account creation process. As a refresher, here’s a video overview that walks through the family experience for this flow.

Once the new version of ETV is rolled out in a few weeks, families will continue to sign Form 8821, but will also have the option to release their transcripts directly by logging into their IRS.gov account.

Finally, I want to invite you to join me for a webinar we’ll be hosting on October 7th at 2pm ET. At the webinar, we’ll talk through how this new flow works in more detail and answer your questions. As always, we are deeply appreciative of your partnership and help in creating the best experience possible for you and your families. If you have any thoughts or questions, please feel free to reach out to me directly.