COMPLETING THE 4506T FOR BUSINESS TRANSCRIPTS

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Clifford Matthews
5 years ago
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1 COMPLETING THE 4506T FOR BUSINESS TRANSCRIPTS The following is a helpful set of instructions to complete the IRS 4506T form to obtain tax transcripts on business tax returns. Presently, the validation of business returns are not required but on one product offered by CMC. Please check with taxresults@crescentmortgage.net if required. However, a properly executed business 4506t may be conditioned for by the Underwriter. It is important to have the form completed properly if validation is required. Each business owned requires a separate form. It is important to know that the IRS has made a change to the 4506t form. The new form has a revision of shown in the lower right hand corner of the form and includes a Signatory Attestation Clause located just above the borrower s signature. The box must be checked by the borrower(s) signing the form. The IRS has very stringent requirements for the completing of the 4506T form. In addition to their requirements, each vendor we use has their requirements as well. The following will provide a generalization of line by line instructions and helpful tips on completing the 4506T form. E-Signature Requirements The information on line 5 needs to be coordinated with E-Signature of the borrower as the signature requirements from each of our vendors are different. They are as follows. Data Verify The actual E-Signature of the borrower and the Audit Log is to be in color. Black and white is not acceptable and will get rejected. CMC needs to submit both to the Vendor. Old Republic For our customers who use Old Republic, The E-Signature of the borrower and the Audit Log can be in color or black and white. CMC needs to submit both to the Vendor. First Line Data - The E-Signature of the borrower can be in color or black and white. The Audit Log does not need to be sent to the vendor but a copy is required to be in the loan file. LINE BY LINE INSTRUCTIONS: Line 1: Line 1 of the 4506T form must contain the exact name of the company and the Federal Tax ID of the business for which the returns are being requested. If the name of the individual person is listed, the request will be rejected. Things to remember regarding Line 1: Line 2: This line is to be left blank. Lines 3 and 4: Line 3 of the 4506T must contain the business s current address. The current address is the last address from which the tax returns were filed. Line 4 may be left blank. If the taxes have not been filed from the address on Line 3, Line 4 must contain the previous address from which the last tax returns were filed. It is always a good idea to include a previous address if there has been a move in the past year. Things to remember regarding Lines 3 and 4: Suite numbers are an important part of the address. The IRS also goes by the USPS address records so it is important to include words like Street, Ave, Drive, etc. Page

2 Line 5: The different vendors we have accounts with have different requirements for the information on Line 5. When CMC requests transcripts, we most often use Data Verify. Their required text is the default when printing docs from our system. Data Verify requires the following text on Line 5: Crescent Mortgage C/O Data Verify, Inc., 8 Parkway Center, 875 Greentree Road, Pittsburgh, PA, If you request transcripts with Old Republic, please taxresults@crescentmortgage.net for their requirements. Lines 6 thru 8: The thing to remember here is to choose one option. Each box is the request for something different and only one item can be requested at a time. Line 6 must contain your request matching the returns, for example 1065, 1120, 1120S, etc. For tax transcripts, choose box 6A. Box 6A will include most of the line items of a tax return and summaries of any schedule. For a record of account, choose box 6C. this selection will include the information describe by choosing box 6A and information on the financial status of the tax account, like payments made, refunds disbursed or other adjustments made after the return was filed. If and extension was filed or amended return were filed for the business, check box 6C. Box 6b is not to be checked as the information received is not complete for UW. The boxes associated with lines 7 and 8 are to be left blank. Line 9: To be safe, Line 9 should list the most recent three years. We like to be proactive and ask this because there are times additional years may be required and transcripts can be requested without have to go back to our customers for a new 4506T form. Signature and Date: All 4506t forms must be signed and dated. The date on the form must be no more than 120 days old. The borrower must check the box for the Signatory Attestation Clause. If your 4506t form has this and it is not checked the request will be rejected. All forms that do not have this clause after December 7, 2015 will be rejected. Title: The IRS has requirement regarding the coordination of the request on line 6 and the title of the borrower. If it is not correct, the request will be rejected. See the chart at the end of these instructions for the correct title to use for the request. Telephone Number: The person executing the 4506T should include their daytime telephone number so that the IRS can contact them directly if they have any questions about the information on the 4506t. Inclusion of a telephone number can help expedite the release of tax information and/or prevent an IRS rejection. Page

3 HELPFUL TIPS: A 4506t form is attached as an example. To obtain successful results, it is best mention the commons errors made resulting in rejections from the IRS. The most common reasons for the IRS rejections from 4506t request are: The information on the form is not correct The information on the borrower s tax returns (name and address) need to exactly match the 4506T information on lines 1 thru 4 on the 4506t form. Names are to include middle initials and suffixes like Jr. or Sr. Addresses are to include text like Street, Ave, Rd. etc. The form was not complete The information on lines 5 thru 9 is missing or the form is not signed or dated. All sections of the form need to be completed. The form is illegible The information required by the IRS is not readable. It is important to remember that the faxing and refaxing of a document can cause the text to become illegible The form was altered Information was crossed out with the correct information written beside it. Even with the initials of the person that made the correction beside the error, the IRS will reject for form being altered. Other examples of altered forms are the cutting and pasting on an original, copied or faxed request and formatting changes like the change to a text size and font. For assistance with the completion of the 4506T form or questions that pertain to a scenario not covered above, please taxresults@crescentmortgage.net. Page

Completing the 4506-T For Ordering of Tax Transcripts using Partners (formerly Old Republic)

Completing the 4506-T For Ordering of Tax Transcripts using Partners (formerly Old Republic) The turn-around times by the IRS can vary for a variety of reasons that include time of year and their operating budget. Ordering transcripts before you submit the borrower s credit package to Flanagan