When you apply for a mortgage, your potential lender needs to know everything about your financial life. That includes your financial history, usually going back a few years. Lenders need to ensure that you’ll be able to pay your mortgage in the years to come, so they look at your income history. The most official record of your income is, of course, your federal income tax return. Since this is personal and therefore private information, the lender needs your permission to look at your tax returns. This is where IRS Form 4506-T comes in.
What is IRS Form 4506-T?
IRS Form 4506T is basically a transcript request form. It’s similar to what colleges and universities use when students need a copy of their transcripts. Because of privacy laws in the United States, college records, medical records, and financial records are protected. The only way a third party can view your private records is for you to authorize them in writing. A signature is needed. IRS Form 4506-T allows you to easily give access to whomever you designate.
Lenders should be very specific about what exactly they need to see. There’s no need for you to simply give them cart blanche to view your entire history with the IRS. Lines 6 through 9 on IRS Form 4506-T allow you to specify what you’re giving permission to release to your lender.
If your lender wants to see information from your W2 or 1099, you’ll have to supply that yourself. The IRS transcript will show the information from W2s and 1099s, but not a copy of these documents. Hopefully you saved them yourself. If you didn’t, contact the employer who issued the W2 or 1099 and try to get a copy.
You can also limit what year’s tax forms you’d like to release to your lender. Maybe they only want 2 year’s worth on the transcript.
Can I Get IRS Form 4506-T Online?
Yes you can but only if it’s being sent to you, a the address the IRS has on file. If you need an IRS transcript for a loan and it’s going straight to the lender, they’ll usually have a paper copy of IRS Form 4506-T and will supply it to you to fill out and they will submit it to the IRS. That’s because they do this all the time.