What is necessary for obtaining borrower income tax information directly from the IRS?

To obtain borrower income tax information directly from the IRS, it is necessary to have a signed and recently dated Form 4506-T. This form allows the lender to request a transcript of the borrower’s tax returns directly from the IRS. It serves as the official authorization from the borrower that enables the lender to access their tax information. The inclusion of the recent date ensures that the request aligns with current tax records, reflecting the borrower’s most recent financial situation.

Accessing tax information is a sensitive process, and Form 4506-T is specifically designed to comply with tax privacy regulations, making it essential for lenders when verifying a borrower’s income as part of the mortgage application process. This form is crucial in confirming the accuracy of the income reported by the borrower on their loan application and ensuring that the lender fulfills its due diligence in the underwriting process.