3 Frequently Asked Questions About The 4506-T Form

What is the IRS Form 4506-T?

The form is used to request a transcript for previous tax years. The tax payer record supplies data for previous tax periods. The request can be made for 1040, 1098, 1099 and a W-2 information is provided with the transcript request. In order to be processed, the form must be signed and dated by the tax payer. The tax return information is submitted to a third party. The form information is only valid for 120 days.

How is the IRS Form 4506-T used?

It can be used for verifying a person’s income. If the person decides to pursue lending, federal tax information requested by an authorized third party can be used to complete the file. A lender could request the transcript information for qualification purposes. If applying for a mortgage, the lender, originator or mortgage broker may request a signed 4506-T form to verify income information along in addition to pulling a credit report. If requested by a lender, the form fees are tied to the cost of the origination or processing fees.

If a person is filing taxes, a third party may request a form to complete the tax return if the W-2 or 1099 data isn’t available. The preparer may request this information using the form because it takes less time to get this information than a complete, thorough transcript of tax info.

How many years can the form be used for?

The 4506-T form can cover requests for up to four tax period. For each income category of information requested, a 4506-T form has to be submitted. One form can cover up to four years of requests for a 1040. If the person has additional income that falls into another category such as a 1099, the information would have to be requested separately through an addition 4506-T form.