In this weeks Blog, I am going to answer that question for you. On every mortgage loan that we do, the lenders require we complete and order a form 4506T for each borrower.
This is an IRS form and the IRS defines the 4506T form as: “Request for Transcript of Tax Return”
We actually order this form from 3rd Party vendors based on the lender the file is going to.
What can we request on the Form?
- Transcript Request (1040, 1065, 1120, etc.)
- Return Transcript – Includes most of the line items of the tax return
- Account Transcript – contains information on the financial status of the account, like was the account paid?
- Record of Account – a combination of the Return Transcript and the Account Transcript
- Verification of NonFiling – proof from the IRS that client did not file
- Form W-2, 1099, 1098 or 5498(I have used this to get W-2’s when the client could not get them)
Why does the lender want Transcripts? This serves as a verification that the borrower has reported to the IRS what we have with Supporting Tax Returns, W-2’s, etc.
What issues do we have?
- Forms must be completed exactly right or processing can be delayed
- How long does it normally take to get the form? Generally, 3-5 business days
- The IRS implemented a new Fraud System and clients have been tagged as potential fraud victoms. In that case, the order will kick back and the client has to contact the IRS to get special codes for ordering.
Hope this helps clear up some of your questions about Tax Transcript ordering.
Have a great weekend!
Managing Partner, Options Mortgage Services