In 4506T, CIC News, Tax Return Verification, Tax Transcripts

The IRS is now accepting Form 4506-C for submissions sent through via IVES and will require this form to be used for this system starting March 1, 2021. However, FNMA, FHLMC, FHA, VA, and USDA all have different requirements as to what forms should be used to obtain the borrower’s tax script.

The following is a summary of these requirements:
FNMA: Requires Form 4506-T to be used. It only permits Forms 4506, 4506-T-EZ, and 8821 to be used in lieu thereof (see FNMA 2020 B3-3.1-06; see also B3-3.1-02 & B5-7-03).

FHLMC: Requires Form 4506-T to be used, but also states that “an alternative form acceptable to the IRS that authorizes the release of comparable tax information” may be used (see FHLMC Single-Family Seller-Servicer Guide ch. 5302.5).

FHA: Forms 4506-T, 4506, and 8821 are listed as being interchangeable and acceptable, but no other documents are specified (see FHA Single Family Handbook 4000.1 II.A.b[ii][C][3] & [x][C][1], II.A.c[ii][C][3] & [x][C][1]).

VA: The VA has noted that Form 4506-T is not required (see VA Circ. 26-20-19), though its Lender’s Handbook does reference it and other IRS forms (see VA Lender’s Handbook ch. 4, 8[d] & [e] for details). In some of these cases, the Handbook does state that an alternative form acceptable to the IRS is a permitted substitute for Form 4506-T.

USDA: Form 4506-T is required, with no substitutions referenced (see RD HB-1-3555 ch. 9.3[E][4] and Att. 6-A).

Please Note;

Because FNMA, FHA, and USDA have inflexible rules regarding which IRS form(s) should be used, you should check with your lenders and underwriters prior to using the new form.

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