Form 4506 C Request for IRS Tax Return Transcript

September 20, 2021


In a world of ever increasing fraudulent scams and cybersecurity risks, tax transcript verification is becoming of utmost importance in the lending process. This allows the lender to verify historical data while also reducing fraud and mitigating risk.

What is Form 4506-C?

In the tightly regulated lending environment that we live in, Form 4506-C is becoming widely adopted as a requirement by lenders for mortgage originators and lenders. Additionally, Fannie Mae views this process as best practice in the loan origination process. Form 4506-C was created to be utilized by authorized Income Verification Express Service (IVES) participants, to retrieve past tax returns, W-2, and 1099 transcripts with the consent of the taxpayer. 

Who utilizes Form 4506-C?

The IVES program is utilized by mortgage lenders and other financial intermediaries that are in need of pertinent tax information for their customers during the loan or screening process. 

Form 4506-C Process & Timeline  
To fulfill a 4506-C Form Request the Taxpayer must fill out the form with their appropriate credentials, then sign and date at the bottom. The IVES participant will then fax the form, with the approved IRS cover letter, to their assigned service center. If an order is requested after 2:00pm ET it is pushed to the next business day for processing. The IRS is allowed up to 48 hours to process the request. In full, the entire process can take up to 60 business days in some cases. Lastly, it is not uncommon for the 4506-C form to face rejection from the IRS. Common rejection items include the address not matching IRS records and illegible data or signatures. 



Image via https://www.treasury.gov/tigta/auditreports/2021reports/202145017fr.pdf

Why ModernTax?

ModernTax provides solutions for businesses to access vitax tax information to better serve their clients. Our solutions curate data directly from the IRS database and is the official record based on reported income and historical filings. It requires no uploading of documents by applicants, no human in the loop, and eliminates 100% of fraudulent data. 

ModernTax offers a no-code version and an API version of our solution. Whether you are in mortgage, property management, tax resolution, or consumer lending the ModernTax solution will allow you to service your customers more efficiently and allow you to increase production volume with historical IRS data being retrieved in minutes. 

Interested in learning more? Please contact blake.grewal@moderntax.io


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