Developing an advocacy strategy with the IRS

July ‘16 Was a Wild Ride! 
Jeff Gentry | Vice President | August 1, 2016

It’s a bit scary to draft this post while there’s still a few working days left in July…  The IRS & SSA, both of which NCS works very tightly with, have thrown NCS and our clients some pretty nasty curve balls over the last month or so.  Here’s a sampling of how our firm and our clients achieved 100% success in complying with the new rules.

Communication with our clients was every bit the largest component to executing our strategy specific to the new IRS requirements.  NCS’ Governmental Advocacy group had an onsite meeting with the IRS a few weeks prior to June 23rd, when the IRS released their Memorandum detailing the timeline and deliverables of their new security program.  Admittedly, there was very little warning of what was coming.  At its core, the Memorandum announced client and IVES participant* vetting procedures that contained in some parts much of what NCS had advocated for over the last 22 years.  NCS wanted to be better vetted, as did many of our fellow IVES participants.  Since we introduced TRV Services in 1994, our clients had been vetted in a manner closely mirroring the on-boarding procedures the credit repositories had required for those accessing credit infiles.  These procedures included on-site inspections, background screening, business credit reports, etc.

The understood objective of the IRS rules was greater transparency and certification of who was accessing IRS transcripts (KYC).  However, the procedures the IRS employed to better know their customer within the original timeline to enact these procedures was unattainable.  I’m not aware of the IRS’ soliciting any industry feedback on the effect the procedures would have upon the mortgage industry, and whether there was any chance of having them fully enacted within 6 working days, which was an absurd timeline.  It was the week leading up to July 4th for heaven’s sake.  Everyone is taking at least a day off or two.

Our team spent many, many uninterrupted hours developing an advocacy strategy with the IRS, pulling together other IVES participants in our common cause and working together with our trade groups, such as the MBA and CDIA.  In the end, the IRS conceded an additional 15 calendar days.  Throughout each step, we e-mailed and called virtually each of our clients to alert them of our strategy and policy design.  It’s a fine line of not overburdening clients with information, and I believe we struck a good balance.  We blended our compliance and certification procedures with existing procedures each client had in place.  In the end, we achieved 100% compliance by the IRS’ stated due date.  Our clients never stopped closing loans due to the IRS’ rules.

Next week, and in a briefer fashion, I’ll describe what we’re doing for our clients ordering our SSA-89 (SSV) solution.  I hope it demonstrates to prospective clients how we’re different.  It’s how we want to make the placement of each manual verification with NCS as effortless as possible.


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