Taxpayer First Act: December 28, 2019 Taxpayer Consent Required Pursuant to Taxpayer First Act

Taxpayer First Act: December 28, 2019 Taxpayer Consent Required Pursuant to Taxpayer First Act

Effective December 28, 2019, a new requirement enacted in Section 2202 of the Taxpayer First Act (https://www.congress.gov/bill/116th-congress/house-bill/3151) will go into effect. That section added the following language to 26 U.S.C. 6103(c):
"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."

The signing of an Internal Revenue Service (IRS) Form 4506-T, Request for Transcript of Tax Return, will no longer be sufficient to allow for the recipient of the tax return to use tax transcripts. The IRS has indicated that the agency does not have current plans to provide updated language to Form 4506-T.  Therefore, loan servicers should consult with their legal counsel to determine how to comply with the new requirement.

This article is posted to make you aware of the issue it describes so you can determine the steps or changes necessary to mitigate or avoid risk, ensure document compliance, or otherwise address the issue. This article does not constitute legal advice. Any legal questions that your financial institution has should be directed to your compliance officer and legal counsel.

Environment:

Taxpayer First Act

ArticleNumber:

000053919

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