IRS Form 4506 and 4506-T: How mortgage lenders verify a prospective tenant’s income with the IRS

Form 4506 and 4506-T

When you apply for a loan, especially for a mortgage, you may have to submit IRS Form 4506 or Form 4506-T. Lenders use these forms to verify your income with the IRS. When you sign and submit Form 4506, the IRS sends a copy of your tax return history (going back up to seven years) to your mortgage lender. Form 4506 or Form 4506-T may also be used to get your own tax information with the purpose of filing an accurate tax return or completing other financial transactions.


What is IRS Form 4506 and Form 4506-T?

Before you can be pre-approved for a loan, a lender needs to review your financial information. The purpose of the review is to verify that the amount of money declared on the loan application matches the amount claimed for taxes (including bank statements, pay stubs and tax returns of previous years).

The main purpose of Form 4506 is to get a copy of a tax return form, such as the 1040, 1120, 941, W-2, etc. The fastest way to get your copy is to file a request form to the IRS electronically. Still, it can take up to 75 days to get a copy of your return. Note that each tax return can cost up to $50.

Form 4506-T, the Request for Transcript of Tax Return, is a standard requirement for many mortgage companies. Form 4506-T is free of charge and transcripts generally arrive in about three weeks. When you file Form 4506-T, you’ll receive a printout of most of the line items on your tax return (not a copy of the actual return).

This document is referred to as a tax return transcript.


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How to complete IRS Form 4506 and 4506-T

For both IRS Form 4506 and 4506-T, you must provide the following information: your name (as shown on your tax return), your social security number, address, the needed tax return form, year or period requested and the total amount of the fee. The form should be signed by the taxpayer and dated.

There is no specific deadline or due date for submission, so you can send the request whenever you feel it’s needed or when a lender asks for it. It takes less than 10 minutes to complete, sign and send a 4506 or 4506-T form electronically to the IRS with PDFfiller. A payment check for a 4506 may also be sent to the appropriate IRS office or scanned and attached to your electronic form.