Bulletin 2023-012 New IRS Requirements for the 4506-C Form – Update

New IRS Requirements for the 4506-C Form – Update

Newrez LLC "Newrez" Approved Correspondent Clients please note The IRS has released the new 4506-C form. The updated form can be used immediately, however the new form must be used for loans delivered for purchase on or after February 6, 2023.

 

The new 4506-C form will have new fields and sections to optimize IRS processing, including some new required fields.  

 

In preparation for the IRS Clean Form Requirements, please follow the guidelines below:

 

  • Keep the original integrity of the form:No changes to the page layout, line spacing, margin or fonts.
  • Be clear of any editing marks:Strikethroughs, circles and arrows are not allowed even if initialed by the taxpayer.
  • ONLY identify the taxpayer(s), form number and tax year(s).
  • List the data in its assigned field: The form has been updated with new fields and sections to optimize the form for processing. The information must be entered in the appropriate field for IRS acceptance. Common mistakes would include putting the Zip code in the Street address field or the Client address in the Client name field.

Review the items below to be prepared to take advantage of this new 4506-C form. The IRS will no longer allow for annotations, which means the 4506-C must meet “Clean Form” standards, and required information must be present on all submissions of the new 4506-C form (version 5-2022) to avoid any potential service disruptions. 

 

Below is a list of items that may require you to update your internal processes to support the new IRS form.   

 

  • Lines 5a “IVES Participant":IRS Income verification Express Services (IVES) Participant information now includes the IVES participant ID number.  All IVES Participant information is required.
  • Line 5b “Customer File Number”: Optional field with specific criteria. Please leave this field blank when using the new form.
  • Line 5c “Unique Identifier”: Optional field with specific criteria. Please leave this field blank
  • Line 5d “Client information”: Client information is required.
  • Line 6, “Transcript requested”: Limited to tax return transcripts (1040, 1065, 1120, 1120-S) and should list only ONE tax form number. Forms with multiple tax forms listed will be rejected by the IRS.
  • Line 7, “Wage and Income transcripts”: Only required to be checked if Wage and Income transcripts (W2, 1099, 1098 or 5498) are being ordered. 
  • Line 7a, “Wage and Income transcripts type”: Limited to Wage and Income form types (W2, 1099, 1098, 5498, etc.) Due to “Clean Form’ requirements, CoreLogic asks that only ONE form number be entered on this line and that the form number matches with your order. Any entries in Line 7a such as NA or Not Applicable will be rejected by the IRS.
  • Signature Section: Taxpayers listed on Line 1a and 2a are required to complete their assigned signature section. Only list a spouse if their transcripts will be requested and they will be signing the request. Forms with missing signatures or required signature information will be rejected by the IRS.
  • Authorized Representatives Check Box: Signing for the taxpayer(s) listed on Line 1a and/or 2a are required to check the “Form 4506-C was signed by an Authorized Representative” box. Forms signed by an Authorized Representative without this box marked will be rejected by the IRS.
  • Electronically Signed Check Box: Taxpayers that sign electronically are required to check the “Signatory confirms document was electronically signed” box. Forms signed with an electronic signature without this box marked will be rejected by the IRS.

 

Resources

 

4506-C Form (Download the form from here)