Updates to Form 4506-C | IRS Modernization

IRS Delay for 4506-C Form

Updated March 1, 2022

At NCS, our goal is to keep you informed of these notifications and advise how they impact your ordering process for tax transcript information. We continue to advocate on your behalf to the IRS through the IRS Working Group and industry counterparts. 

UPDATE: The IRS has delayed the deployment of the OCR implementation for Form 4506-C to October 1, 2022. NCS have already deployed the new IRS requirements on January 18, 2022 along with the minor UI changes for ordering products. For example, if you want standalone W2s, in the ordering process check the W2 option. You will be presented with a new form upload requirement and a tool tip for the W2 order.

Per the latest announcement from the IRS regarding their current efforts of modernization as required in the Taxpayer First Act, here are some critical dates to remember:

• October 1, 2021 -- new deployment date for Form 4506-C with OCR implementation
• January 18, 2022 -- NCS have deployed the new IRS requirements

*NCS will continue to annotate the 4506-C Form for our clients through September 30, 2022. 

Starting October 1, you'll be required to list W2 on Line 6. Only one (1) product can be on Line 6. If a 1040 and 1099 are ordered on the same 4506C, the 1099 transcript will include W2 information if W2 information is available.

Reminder: To get W2s as of October 1, 2022, the form needs to list W2 on line 6 and only 1 product can be on line 6. The new 4506-C form (OCR version) has not been released yet by the IRS. 

Please read the IRS IVES notification below on how this will impact your 4506-C ordering process and fees you will be charged by the IRS. Taxpayer First Act. 

The IRS IVES team states the first step in modernization includes Optical Character Recognition (OCR) software to process your FORM 4506-C requests.  Here are the key takeaways:

1. “Be clear of any editing marks.” The Form 4506-C should not display any edits or multiple forms.

• If the Form 4506-C includes edits, the form will not pass OCR.  It will be processed using existing manual IVES protocol following a longer processing timeframe.  As well, standard IRS rejections will apply. After January 17, 2022 IRS rejections may increase for “edited” forms and incur extended processing timeframes.

2. “Only identify the transcripts, tax years, and/or taxpayers that need to be processed.”  The clean form should only display the details and checkbox for the transcript, tax years, and/or taxpayer you are requesting versus multiple transcript types

• Line 6 should contain a single transcript request only such as 1040
• A single checkbox should be selected to match Line 6
• Line 8 should display only the years you are requesting

3. “List the data on the assigned lines.”  Same as above.

• Line 6 should contain a single transcript request only such as 1040
• A single checkbox should be selected to match Line 6
• Line 8 should display only the years you are requesting

NCS' TRV Services primary concern is ensuring that our TRV® Services customers have the most recent and up-to-date information from the IRS to make their lending decisions. We will always operate with that in mind.

For more information on the IRS website, click here.

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