Most Common Q&As: 4506-C Compliance & Rejection

Depending on the chosen service method, processing can take as little as 2 hours up to 72 (business hours). Service methods: Same Day - Taxpayer authorization through online tax account – within an hour. Standard - generally 2–3 business day based on IRS (excluding weekends and holidays). Easy Verification delivers transcripts upon receipt.

IRS fee is required for each transcript requested, regardless of whether the request is completed or rejected by the IRS. Easy Verification rates include the IRS fee.

The IRS must receive Form 4506-C within 120 days of the taxpayer's signature date or it may be rejected. Lenders should prioritize submission immediately after the borrower signs. [IRS]

If IVES queues slow, Easy Verification implements contingency routing and live monitoring to maintain delivery SLAs, even during IRS service interruptions or downtime. [13]

Lenders using Same Day service: Borrowers may confirm transcript process status directly through their IRS account . Easy Verification notifies lender with real-time status updates.

The IRS can reject up to 40% of Form 4506-C submissions through Standard (legacy) method, often due to minor inconsistencies like typos or discrepancies between borrowers' names, addresses and IRS records. Easy Verification workflow dramatically reduces this rate prior to IRS submissions.

Common rejection items include the address not matching IRS records and illegible data or signatures. The 4506-C and the corresponding info on the tax returns has to match perfectly.

Rejection Code 10 means the IRS is unable to process the request due to limitations. The IRS has provided a limited list of transcripts it will not provide, such as foreign returns (Form 1040-NR), some amended returns (1040X), and returns under IRS investigation.

For issues other than rejection Code 10, lenders should attempt to obtain a corrected and signed Form 4506-C.

Lenders can reduce IRS rejections by submitting fully typed, legible forms with exact taxpayer name and address matches. Easy Verification’s automated validation tool detects mismatched or incomplete fields instantly before submission. How to Avoid IRS Form 4506-C Rejections.

Forms must be a CLEAN, typed is preferred with handwritten signature and/or sign sate and/or title. Handwritten form is acceptable only if legible, free from marks.

Use Form 4506-C (Rev. 10-2022). Requests may be rejected when older or altered versions are submitted.

Only one tax form number per line 6 (1040, 1065, or 1120, etc.) can be requested per Form 4506-C. Self-employed borrowers need separate forms for personal and business returns.

If requesting transcripts for both spouses on a joint return and listed on the form 4506-C, both must sign. Either spouse may individually request transcripts and must be listed on Line 1a, signed and dated.

Yes — IVES remains available to all lender types, including non mortgage loans. The IRS had initially planned to end lender access in 2024, but that decision was suspended, allowing continued use of IVES for SBA, commercial, auto, personal, and other non mortgage lending. Easy Verification, an authorized IVES participant’s new client onboarding process includes a strict vetting process to comply with program guidance.

The IRS enhanced automated processing optimized for clean typed Form 4506-C and no handwritten corrections for successful approval. Handwritten forms may trigger a manual review slowing the process, legibility is a must. For Same Day service–handwritten is not an issue.

Only IVES participants that opt in to Electronic Signature usage can accept electronic signatures. Easy Verification requires e-signature summary audit log with every 4506-C. IRS e-signature.

Forms marked electronically for wet signature will be rejected.

Fannie Mae requires lenders to have each borrower whose income is used to qualify complete and sign a separate Form 4506-C at or before closing.

When all of a borrower's income is validated by the DU validation service, the lender is not required to obtain a signed Form 4506-C for that borrower.

Without a signed IRS Form 4506-C, lenders cannot verify income data through IVES or IVES participants, which can delay or disqualify the loan for compliance-critical programs. One option - Easy Verification offers Same Day service where the borrower authorizes the request through their IRS online account.

Yes. SBA lenders are required to use IRS Form 4506-C to obtain tax transcripts for disaster loans and borrower income verification as part of the agency’s underwriting process.

All 4506-C transcript data is protected with end-to-end encryption and handled under strict SOC 2 and IRS IVES security compliance standards at every stage of transmission through Easy Verification.

No, because only one tax form number can be requested per 4506-C. You would need to fill out a separate form for each, such as one for a personal Form 1040 and another for a business Form 1120. [13]

Yes. Lenders commonly use IVES transcripts for quality control (QC) and post-closing income verification to protect loan sale eligibility. [1]

4506-C form remains a staple in mortgage lending because it’s a well-established, compliant method of obtaining full tax return transcripts; IVES delivers taxpayer return authentication that meets investor and agency underwriting standards. Form 4506-C taxpayer authorization options are handwritten, e-signed, and digital consent. The alternative is Form 8821 with taxpayer’s digital consent can authorize access for several years, borrowers can revoke access at any time by notifying the IRS in writing.

Manual 4506-C turnaround times of up to 2-3 days on average, rejections for addresses mismatched requires a corrected or updated Form and a resubmit. Same Day 4506-C turnaround times can be within an hour with taxpayer’s authorization through their IRS account.

Line 5a on Form 4506 C is for IVES participant’s information — the company that will receive the transcript from the IRS. Your lender would have that information. Easy Verification is the IVES provider to your lender and cannot be blank or N/A. Line 5b and 5c are fields designated for file reference tracking for lender use. (optional). [IRS]

Line 5d requires the Client company name, address, and phone number. A Client company receives the requested tax transcripts from the IVES participant. These fields cannot be blank or marked Not Applicable (NA). [IRS]

Easy Verification is an IRS-authorized IVES participant delivering secure, digital transcript retrieval trusted by banks, SBA lenders, independent lenders, education institutions, benefit managers, credit unions, and mortgage lenders nationwide. [3] [4]