As of December 28, 2019, the IRS will require borrowers to sign a consent for a lender to share tax transcripts with others such as investors, quality control vendors, and servicers. The requirements are found in Section 2202 of the Taxpayer First Act. Today the IRS clarified that the requirement does not apply to loans in which transcripts were obtained prior to December 28, 2019. The guidance issued by the IRS reads as follows:

“Section 2202 of the Taxpayer First Act amended the provisions of IRC section 6103(c) by adding the following language: “Persons designated by the taxpayer under this subsection to receive return information shall not use the information for any purpose other than the express purpose for which consent was granted and shall not disclose return information to any other person without the express permission of, or request by, the taxpayer.”
This provision limits the redisclosure and use of return information in the case of taxpayers who have consented to the disclosure of their return information by the Internal Revenue Service to a third party under IRC section 6103(c). Section 2202 of the Taxpayer First Act applies only to disclosures made by the Internal Revenue Service after December 28, 2019, and any subsequent redisclosures and uses of such information disclosed by the Internal Revenue Service after December 28, 2019.”

Agency Loan Quality Initiatives (LQI) still require the tax transcripts to be in the file on every loan selected for quality control. The taxpayer consent form will need to be in every file in case they are selected for quality control.  This form is different from the “Borrower’s Consent” form which is also still required.

The Stonehill Group will not be able to order or review any tax transcripts for the audit if this form is not present and fully executed. Since this is still an LQI requirement you will see a defect on your reports if we are not able to review the tax transcripts if required. For those clients that are not LQI compliant this will only apply on loans where tax transcripts were required to qualify the borrower in underwriting.

Learn More: Fanniemae/Taxpayer First Act

If you have any questions please feel free to reach out to your Client Services Manager, Donna Rowe, at