***UPDATE***
Verbiage in optional paragraph has been updated as follows:
“I understand, acknowledge, and agree that the Lender and Other Loan Participants can obtain, use, and share personal tax return information, and, as applicable, business tax return information, from every business tax return for which my Lender has attained a form 4506.”
In mid-2019, the Taxpayer First Act was passed into law, with part of that law, Section 2202 of the Act, requiring the specific consent of the borrower to share their tax information. The IRS did not provide any prescribed consent language; however, as an assistance to the industry for its members, MISMO and the MBA worked together to create language.
In November 2019, DocMagic created a new form called the “Borrower Consent to the Use of Tax Return Information” (DocMagic Form ID: BCUTRI.MSC) (“Borrower Consent”) that provides the MISMO-created consent language. The form is provided in all Initial and Closing Disclosure packages, along with IRS form 4506-T. You can view our prior article announcing this new form here.
Recent investor reviews of regulatory and credit practices of loans delivered for purchase led to a request for additional language to be added to the Borrower Consent form for self-employed borrowers with multiple businesses. The additional language confirms taxpayer consent for all tax return transcripts obtained, including those related to any and all businesses.
To accommodate this request, DocMagic has created an optional form feature that adds the following paragraph to our existing Borrower Consent form:
“I understand, acknowledge, and agree that the Lender and Other Loan Participants can obtain, use, and share personal tax return information, and, as applicable, business tax return information, from every business tax return for which my Lender has attained a form 4506-T.”
The form feature will be added upon request, so please contact customerservice@docmagic.com if you wish to utilize this additional language.
