Purpose of IRS form 4506

Guest

While applying for a mortgage, I was asked to sign IRS form 4506? Now what this form is for?

blue · Posted: Fri Apr 07, 2006 5:03 pm Post subject:

Hi CFGuy,

Mortgage applicants are asked to sign Form 4506 by many commercial lenders as a part of the application process. This form is nothing but a request for copy or transcript of your tax form.

Once you sign it, the lender can receive copies of your tax return directly from the IRS.

Regards,
Blue

Guest

It is required to submit previously filed tax returns are required before loan approval. But be cautious of signing authorization for the lender to investigate into your data on a long-term basis. This way you may lose controls to insure privacy.

jerry · Posted: Fri Apr 07, 2006 7:19 pm Post subject: RE:

As far as I know it is a part of loan application process.

Thanks,
Jerry

Bill · Posted: Mon Apr 10, 2006 11:19 am Post subject:

CF,

This is a great question and one I explain on a regular basis to my borrowers.

As a borrower qualifying for a mortgage where you actually prove your income, you will be required to provide supporting income documentation such as pay stubs, W2's and past Federal Income tax returns.

In this computer day and age, any of these documents can easily be 'manufactured' on a home computer. To fight fraud, one-in-ten mortgage loan files are audited to ensure the consumer provided income documents actually meet those official tax documents filed with the Internal Revenue Service.

The lender will use the 4506-T or "Request for Transcript of Tax Return" to obtain copies of the borrowers tax filings directly from the IRS so as to match the information with the consumer provided copies ... ensuring the loan application's income is true and correct.

Per the directions listed on the 4506-T, please ensure you do not sign a blank form. Make sure it is completely filled-out.

Hope this helps!

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