Update to Taxpayer First Act (HR 3151) | Subtitle C, Section 2201 & 2202

November 15, 2019
  • December 28, 2019: New Taxpayer Consent Language must be implemented 
  • January 1, 2020: IRS transaction fee increased to $3.00 or each transcript year requested 

The Taxpayer First Act became public law on July 1, 2019. Our last notification provided information on Section 2201 regarding a proposed increase in the IRS transaction fee effective on January 1, 2020. This notification provides the approved fee increase amount as well as information on Section 2202, which limits redisclosures and uses of consent-based disclosures of tax return information.

Section 2201 authorizes the IRS to develop an automated system to receive your 4506-T orders and return the IRS tax transcript data in real time* versus the current delivery of 4506-T via a secure fax system with IRS tax transcript data returned in 48-72 hours. Funding for this automated system will be accomplished by the IRS increasing the current fee of $2.00 per transcript year to $3.00. The new fee becomes effective January 1, 2020.

Section 2202 limits redisclosures and uses of consent-based disclosures of tax return information. The current method of taxpayer consent is having your borrower sign the 4506-T. Section 2202 modifies the existing tax code and requires that you inform the borrower of the “express purpose” for which their tax transcript data will be used. In addition, Section 2202 will now require that borrowers provide “express permission” to allow your organization to share their tax transcript data with other loan participants.

It is suggested that you consult with your document prep companies and LOS providers to ensure compliance with Section 2202. The revised Taxpayer Consent Language must be implemented by December 28, 2019.

MISMO has created a model Taxpayer Consent Language: http://www.mismo.org/standards-and-resources/additional-tools-and-resources/taxpayer-consent-language

Should you have further questions you may contact customer service at 800-582-7066.


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