IRS Form 4506-T – What You Really Need to Know
4506-T is a form for retrieving tax transcripts from Internal Revenue Service (IRS). It can be used to order 1040, 1065, W-2, or 1099 transcripts. Form 4506-T duly filled and signed by the tax payer gives permission to a third party to retrieve his/her tax return data.
Lenders require mortgage applicants to fill and sign 4506-T form prior to approving their application. It acts as an effective tool for lenders to ensure that the applicant’s information is correct and up to date.
Tax transcript serves three key purposes:
• It gives an independent verification of the borrower’s income and employment status
• It ensures the tax return provided by the borrower is consistent with the IRS tax transcripts
• Leveraged smartly, tax transcripts can prevent potential frauds on the mortgage applications, mitigating risks.
Thus, tax transcript connect the dots, giving the lender a complete financial picture of the borrower to make high quality decisions.
Are You Specifying Date Before Signing IRS Form 4506-T?
We need to understand that Form 4506-T is not just another lengthy document to complete. Borrowers often make the mistake of signing 4506-T without specifying a date as to which years of IRS records the lenders can access. Do not give in to haste or pressure when filling form 4506-T. Pay close attention to the IRS instructions while filling the particulars and specifying the date.
If your lender insists or puts pressure on you to sign form 4506-T without any date specification, it’s a red flag. The experts recommend that doing so potentially might enable the lender to access IRS records with no time limit or even worse, put your otherwise confidential information accessible to other people.
Pay close attention while writing the date in form 4506-T. Suppose you submit your tax returns for the year 2013 and 2014. In that case, you need to specify in the form that the third party can pull the tax transcripts only for those years. One can request up to last 4 years of tax information via 4506-T.
Moreover, to avoid misuse of your form, make sure you specify the date of signing it. The signing date is important – IRS doesn’t process an order if it receives the transcript request after 60 days of the signing date.
We Are the Experts
Over the years, we’ve established ourselves as a technology and service leader in tax verification. As an authorized bulk vendor of the IRS, we process hundreds of thousands of 4506-T requests annually through the IRS system of data processing centers. Our advanced technology, combined with our tight integration with IRS and SSA systems enable us to process your order – fast, simple and accurate.