In today’s hiring environment, human resources professionals, compliance officers, and background screening providers face growing pressure to verify employment data quickly, accurately, and within strict legal frameworks. Delays or errors in this process can have significant consequences that range from frustrated candidates to compliance violations, expensive lawsuits, and reputational damage.
Traditionally, organizations have relied on two main approaches: manual verifications or proprietary databases such as The Work Number (TWN). While both methods have been industry staples for decades, each comes with well-documented flaws that increasingly put employers at risk.
The good news is that a better, federally backed alternative exists: the IRS’s Income Verification Express Service (IVES). Whether used alone or as part of a hybrid model with manual verifications, IVES offers a faster, more reliable, and legally defensible way to validate employment and income.
The Traditional Options: Manual Calls and Proprietary Databases
Manual employment verifications have long been the fallback option for HR teams and background screeners. This process usually involves calling or faxing HR and payroll offices, chasing down managers, or requesting employee-provided documents. While simple in theory, the reality is that manual verifications are slow, inconsistent, and expensive to manage at scale.
Turnaround times often stretch into days or weeks, depending on employer responsiveness. Staff hours are consumed with repetitive follow-ups, and even after multiple attempts, some employers simply refuse to provide records. Worse still, the information that is eventually obtained may be incomplete, outdated, or riddled with human error. For fast-moving hiring environments, these inefficiencies translate directly into lost productivity and delayed onboarding.
To solve those pain points, many organizations turned to The Work Number, a proprietary database that aggregates income and employment data from participating employers. On the surface, TWN promises faster turnaround and a more streamlined process. But those conveniences come with major caveats.
TWN is notoriously expensive, with per-transaction fees that add up quickly. Its coverage is limited to employers who participate in its network, leaving gaps for contractors, gig workers, and the self-employed. Even more concerning, TWN has been the subject of litigation and regulatory scrutiny around issues of privacy, data consent, and accuracy. For organizations that need verifications to stand up to audits and legal reviews, the model raises serious compliance red flags.
Enter IVES: A Federally Backed Alternative
The IRS’s Income Verification Express Service (IVES) represents a different approach. Rather than relying on third-party payroll feeds or manual follow-ups, IVES provides direct access to IRS-filed tax transcripts, including W-2s, 1099s, and full tax returns. These records are retrieved only with the taxpayer’s explicit consent, provided via IRS Form 4506-C.
For HR teams and background screening providers, this matters for three critical reasons:
- Accuracy: IVES delivers the official records used for compliance, lending, and federal reporting. These are not employer-submitted documents subject to clerical error; they are the IRS-filed tax records themselves.
- Compliance: Because the process requires direct taxpayer authorization, IVES avoids the consent challenges that have plagued TWN. Employers and screeners gain peace of mind knowing that the data exchange is legally defensible.
- Coverage: Unlike payroll databases that cover only participating employers, IVES reflects all reported income sources. That means W-2 employees, contractors, gig workers, and self-employed individuals are all represented.
When combined with integrations currently offered by only one or two providers like Red Trends Technologies, IVES can be accessed in near real time through API connections or delivered securely through the IRS Web UI portal for single-use cases. This flexibility makes it suitable for both high-volume screening programs and smaller employers with occasional verification needs.
IVES vs. The Work Number
When stacked against TWN, the advantages of IVES become clear:
- Litigation & Compliance: TWN continues to face lawsuits and regulatory inquiries around privacy and data consent. IVES eliminates these risks through taxpayer authorization.
- Coverage: TWN covers only its payroll network, excluding nontraditional workers. IVES covers all IRS-reported income sources.
- Cost: TWN is one of the most expensive verification methods in the industry. IVES, by contrast, provides official, comprehensive data at a fraction of the price.
- Data Authenticity: TWN depends on employer payroll records that may contain errors. IVES reflects what has been officially filed with the IRS.
For industries where litigation risk and compliance oversight are highest (such as financial services, healthcare, and government contracting) these distinctions are especially important.
IVES vs. Manual Verifications
Manual verifications may feel familiar, but they represent the least efficient path forward. Consider the common pain points:
- Delays: Phone- and fax-based processes can drag out for days or weeks.
- Labor Costs: Staff time is consumed by repetitive outreach and follow-ups.
- Inconsistency: Data quality depends on employer cooperation and accuracy.
- Failure Rates: Employers often stop responding after a set number of attempts.
IVES cuts through these challenges by delivering fast, secure, IRS-verified records. With API-enabled platforms, turnaround time is measured in minutes, not days. For employers trying to balance candidate experience with compliance rigor, this difference can be game-changing.
Building a Smarter Hybrid Model
While IVES is powerful enough to stand on its own, many organizations find value in combining it with manual verifications. For example, employers may choose IVES as their default verification path but keep manual outreach as a backup for unique cases, such as recent hires whose tax records haven’t yet been filed.
This hybrid approach ensures comprehensive coverage while minimizing delays and costs. Technology partners can help HR teams design workflows that route requests intelligently, maximizing automation while preserving human oversight where needed.
The Future of Employment Verification
The employment verification landscape is shifting rapidly. Manual verifications are too slow for today’s hiring demands. Proprietary payroll databases like TWN are under increasing scrutiny for cost, fairness, and compliance risks.
IVES, by contrast, offers a federally backed, consent-driven, and audit-ready solution that aligns with both business needs and regulatory expectations. As more organizations embrace digital transformation in HR, IVES is emerging as the gold standard for employment and income verification.
For HR leaders and compliance teams, the takeaway is clear: IVES is not just another option. It is a smarter, faster, and more legally defensible path forward—whether used alone or as part of a balanced verification strategy.
