The 4506-T form is one of the most important non-tax forms that the IRS handles. It’s the form to request tax transcripts and is needed in a myriad of applications like student financial aid, mortgages, small business loans, and even bankruptcy. Tax transcripts have replaced copies of tax forms as definitive proof of income, proof of filing status, and proof of taxes paid. Electronic services for easy retrieval of tax transcripts have made getting transcripts very quick and easy.

The 4506-T form in particularly important for those filing bankruptcy. The bankruptcy code requires that all Chapter 13 filings include returns for the last 4 years prior to the date of filing for bankruptcy. These forms must be filed with the IRS before the first creditor meeting. It further requires that those filing bankruptcy must also timely file all tax forms that become due after the bankruptcy filing date. Tax transcripts are a definitive proof of filing and incomes so they are often required by trustees as early as possible in the process.

Tax transcripts help trustees and the judge properly determine your income level and the type of bankruptcy that you might be eligible for. Income requirements are different for the types of bankruptcies. If your income is too low, you might not be eligible for a Chapter 13 and if your income is too high, you might not be eligible for a Chapter 7 filing. Since trustees have a good look at your income with your tax transcripts, they can determine the likelihood that you can repay the debt and your eligibility for debt relief.

If you are going to file bankruptcy, now is a good time to fill out a Form 4506-T to request your most recent tax transcripts. Remember to request the 4 most recent years, depending on the type of bankruptcy you are filing. If you use an electronic service to file Form 4506-T, then you can speed up the process of getting your tax transcripts.