Please read the instructions in the link carefully to determine the best way to order your tax trancripts with the 4506-C disclosure.
- Starting in January 2022, the IRS will be implementing a new system for processing 4506-C results. The good news is, it should speed up the process as they are automating the request process. The bad news is the IRS will no longer rely on the third-party tax transcript vendors to determine which transcript options and which tax years to order. When this change goes into effect, the IRS will begin to return everything that is marked on the 4506-C request. This means if the 4506-C has three years listed it will return three years of transcripts, even if the request to our third-party provider was requested to only bring back the most recent year. Additionally, if the form indicates W2 and 1040 transcripts, it will return both – not just the type of transcripts that was requested from the third-party provider. We did a random audit with one third-party tax transcript provider and every single one of the requests we sampled had information on the form that was not requested through the third-party provider (so too much information was provided on the forms). We highly suggest users to start to ensure the 4506-C form being sent to the IRS only requests what is desired from the IRS– so that by the time the process is in place, you will not be getting back information that you do not want to have provided. Once this new process is in place, PRMG will be charged for every tax year and transcript type on the form - regardless of what is indicated to the third-party provider. Click here for information from the IRS on this upcoming change. Additionally these requirements will apply:
- An individual form for each borrower and each form type being requested is required (this means it requires separate W2s and 1099s for each person - you cannot have two people listed on a 4506C)
- If requesting 1040 for joint borrowers, only one borrower’s form is required for the 1040 request
- The 4506C must be all in typed font and not handwritten in wet ink as the new OCR system at the IRS will not read wet ink
- Each 4506-C form should contain only one X mark corresponding with the requested form type in the boxes for lines 6A-7 (multiple boxes cannot be checked)
- The 4506-C should only include the years being requested when the order is placed