IRS Continues Vital Transcript Service

Mortgage lenders and other financial institutions were relieved when the IRS declined a request from the Treasury Inspector General to shut down its Income and Verification Express Service (IVES), routinely used by mortgage lenders, other financial institutions, and tax preparers to verify income of taxpayers. 

The Mortgage Bankers Association (MBA) had strongly opposed the suggested shutdown, arguing that mortgage lending would grind to a temporary halt if lenders were unable to access IRS data on the income of prospective borrowers. Even a short-term shutdown would have interrupted thousands of verification requests, and significantly delayed mortgage lending. Virtually all of the MBA’s 2,300 members use the program, as do the Federal Housing Administration, Fannie Mae and Freddie Mac.  

It was the Inspector General’s March 23, 2018, audit report that had suggested the IRS shut down the program until it could verify that only legitimate taxpayers sign the Form 4506-T “Request for Transcript of Tax Return,” a document that allows the release of their transcript to authorized IVES participants. In declining the request, the IRS, stated that new IVES participant certification requirements were adequate to provide the necessary security protections.  

The IRS has also formed a working group to consider improvements to the transcript process, which met on March 14. And a discussion draft of an IRS reform bill released by the House Ways and Means Oversight Subcommittee on March 26 would authorize the IRS to develop a new IVES system funded by user fees. Among other suggestions, the bill would replace the current facsimile-based IVES system with an internet based system. 

Although changes may be coming, it appears there is widespread agreement on the importance of the IVES system among government and private sector stakeholders. 

Worldwide ERC® members will benefit from the maintenance and improvement of the system through the orderly and timely processing of mortgage financing and home sales.

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