Is Your Loan Waiting For Your IRS Tax Transcripts?
IRS Direct Tax Return Verification (4506-T) Service from Avantus is the fastest and easiest way to verify borrower income available on the market today — and with the recent integration of 4506-T Electronic Signature capability, mortgage loan originators can significantly streamline operations and get their loans to closing faster.
With more lenders requiring a 4506-T tax transcript on every loan and faster turnaround, time lost processing transcripts manually could mean fewer closed loans.
The Avantus IRS Direct Tax Return Verification Service with electronic signature automates the entire 4506-T process to verify income. Avantus customers can process requests in the Avantus online ordering system or in their loan origination system, such as Calyx, Encompass, and LendingQB. The IRS Direct Service tracks each tax transcript in real-time from submission of the 4506-T request through the delivery and viewing of the finished report. You will always know where your requests are in the process, helping you get your loans to closing quicker and easier than ever before.
Verify up to four years of previous income and receive your tax transcripts in 24 to 48 hours. By interfacing directly with the IRS, Avantus customers can be confident that they are receiving their reports as soon as they are available; virtually eliminating the time, expense and errors of manual processing.
4506-T Electronic Signature Capability
Lenders now have the capability to utilize IRS E-Signature for their 4506-T verifications with Avantus. This completely paperless process can significantly reduce costs and turnaround time by reducing errors and lag time associated with the traditional "wet" signature process. For lenders that still do not accept electronic signatures, Avantus will continue to support traditional 4506-T submission in the same secure and efficient manner as before.
Benefits of Using E-Signature on 4506-T
- Streamlines documentation processes, getting loans to closing faster
- Reduces IRS rejection rates due to errors
- Reduces signature fraud
- Improves the overall experience for your borrowers
Frequently Asked Questions
What is a Form 4506-T?
Form 4506-T is an Internal Revenue Service (IRS) document that is used to retrieve past tax returns, W-2, and 1099 transcripts that are on file with the IRS. The document gives permission for a third party to retrieve the taxpayer's data. The taxpayer must sign and date the 4506-T. In today's tightly regulated lending environment, many lenders are requiring that mortgage brokers and originators not only pull the traditional tri-merge credit report, but also verify the borrower's income with a 4506-T.
How long does it take to receive tax transcripts?
Completed tax transcripts usually are received within 24 - 48 hours or less but the IRS has up to 48 hours to process the request according to their guidelines for bulk vendors. Be wary of vendors who can promise 8 hour turn times as that is not part of the IRS program guidelines for processing 4506-T tax transcripts.
Note: The IRS considers any request for tax transcripts received after 2:00 p.m. EST as a next business day order.
How does Avantus complete their requests so fast?
Avantus as an industry leader in mortgage credit report processing, has used its technology solutions to streamline much of the manual processes out of ordering IRS Form 4506-Ts
Can I go directly through the IRS to receive the transcripts?
Yes, but it can take anywhere between 10 to 60 days to receive the tax return data from the IRS.
What are the different types of IRS forms that can be requested via the 4506-T?
With the IRS Form 4506-T you can order 1040 (personal), 1120, 1065 (business), W-2, and 1099 tax transcripts.
Special Instructions for Business Transcripts (1065 or 1120):
When ordering business tax transcripts, remember that business tax information is reported quarterly and should be requested using quarterly dates on Line 9. For example, if you need all reporting periods for a given year, you would need to indicate each period on Line 9 (ie. 1/31/2013, 3/31/2013, 6/30/2013, 12/31/2013). Entering just the year on Line 9 will only return a transcript for the last quarter of that year.
What is the difference between the IRS Form 4506 and the IRS Form 4506-T?
The IRS Form 4506 is used to retrieve photo copies of the tax returns that were filed by the taxpayer. 4506 can take the IRS up to 60 days to complete. The IRS Form 4506-T is used to obtain IRS Tax TRANSCRIPTS.
How long is the signature date on the 4506-T good for?
IRS Form 4506-T must be signed and dated by the taxpayer, either in person or via electronic signature. The date is good for 120 days.
How much does it cost to place an order for a tax return verification?
Prices vary depending on how you access the system, volume, etc. You may call 800.243.0120 or email us for a quote.
How do I pay for tax return verifications?
We accept major credit cards including: Visa, Master Card, American Express, and Debit Checking Card. You may also be setup on net 30 for all corporate accounts, call for details.
Are there any fees to setup an account?
No, Avantus never charges a setup fee and if you're not satisfied after three orders you pay nothing and we will close your account.
How are the IRS transcripts delivered?
The IRS tax transcripts are delivered electronically into your order profile on our secure website. When Avantus receives the data from the IRS an email is sent to notify the user. The transcripts come in PDF format (Adobe Acrobat is required to view document.)
How do you place a 4506-T Order?
Our tax transcript ordering process is fast, easy, and simple. You login to our website and create the order online by uploading the form 4506-T directly into our online ordering system. You will then check off the items you need to match the 4506-T form and the system takes over from there, it's that EASY!
For step-by-step instructions on ordering from the Avantus system, read How to Order Tax Return Verifications.
How many years of tax return information can I request?
You can request verification of up to the last 4 tax years.
The tax payer filed an extension this past tax year. How long does it take the IRS to add the tax return to their database?
It typically takes the IRS 6 to 8 weeks to add new filings or corrections to their database.
What are some of the most common reasons why an IRS Form 4506-T are "rejected" or not processed?
The most common reason why the IRS will not process an order is that the address does not match the tax year that is requested on the form. You should put previous addresses on Line 4 of the IRS Form 4506-T. Another reason is that the data on the form or signature is "illegible". Using electronic signatures can significantly decrease rejected 4506-T forms.
If there is a problem with my tax return verification order how will I be notified?
An email and a phone call will be sent to the person who placed the order explaining the nature of the problem reported by the IRS.
If you would like more information about our new IRS Direct Tax Return Verification Service, give us a call at 800.243.0120. We look forward to hearing from you.