New IRS Requirements Regarding Form 4506-C

The IRS has announced some important changes to how they accept 4506-C forms based upon their move from a manual process to an automated process through Optical Character Recognition (OCR) software.

They anticipate this will significantly improve their efficiency; however, this might dramatically impact your internal process of collecting 4506C’s from borrowers.

The IRS implemented this new automated process October 1, 2021, however, it will not be required until January 1, 2022. 

1. Must be a CLEAN typed copy of the 4506-C form.
a. Handwriting is unacceptable, except for the Signature and/or Sign Date and/or Title.
b. The form cannot be a combo of handwritten and typed.
c. No cell phone pictures of the form.
d. No reduced size of the form.

2. One person per form. (If NOT filling joint returns)
a. If borrowers did NOT file joint tax returns, you must have a 4506-C for each borrower.
b. List primary taxpayer on Line 1.

3. One Product per form per person.
a. Only 1 box can be checked per each product per each person.
b. Multiple boxes cannot be checked on the 4506-C.

4. The years being requested must be listed on Line 8.
a. No additional years should be listed on Line 8.