An Indepth Look At The Tax Transcripts & 4506-Ts


Lenders have begun experiencing difficulty in regards to obtaining tax information from the IRS. Initially the IRS blamed the slow transcript turn times on budget cuts. The IRS believes that their computers are running slower even as employees get paid less. It is true that the IRS is experiencing a lack of funding and difficult decisions are being made as a result of this.

Freddie Mac responded to some issues where requests submitted through IRS Form 4506-T, request for transcript of tax return are getting returned with a code of limitations. This code will guard against identity fraud and keep criminals from getting unauthorized access to taxpayer information. IRS form 4506-T is structured to point out a borrower’s income or their Social Security number. You can guard against fraud by looking at the single family mortgage fraud best practices document.

Fannie Mae does not require tax transcripts. All lenders must obtain a completed and signed IRS Form 4506-T during the underwriting process. Lenders can submit borrower income. The IRS has made policy changes, which means that third party requests for IRS transcripts may be rejected or blocked.

Delays in getting IRS transcripts has caused some mortgage companies to give temporary guidance to meet any underwriting requirements. Penny Mac is working with USDA Rural Housing’s Single Family Housing origination update to look at tax transcript rejections from the IRS.

Envoy Mortgage has announced that 1040 tax transcripts will no longer be required. The IRS is denying requested tax transcripts. The IRS will mail a notification to the borrower talking about the situation. The IRS won’t give the tax transcripts directly to the lender, they will have to get them from the IRS. The IRS application called Get Transcript has been temporarily closed because people can receive access to personal tax payer information.

New economic data is showing increased momentum in regards to the US economy.

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