After the conclusion of a successful pilot program, the Internal Revenue Service is planning to roll out the production version of its electronic signature capabilities for Form 4506-T by the end of 2012, according to officials who detailed the plans during the MBA tech show in Phoenix this week.
The presentation at MBA was the IRS’s first public comments about the 4506-T e-sign initiative. The form, also called the “Request for Transcript of Tax Return,” is a crucial income verification tool for mortgage lenders and other credit-based lenders, but is the only document in the initial disclosure package of government-sponsored enterprise mortgages that must be ink, or wet, signed.
Paul Mamo, IRS deputy director of submission processing, acknowledged that the program is a long time coming since the passing of the federal Electronic Signatures in Global and National Commerce Act in 2000.
“I know the ESIGN Act has been around for 12 years and here we are just now talking about e-sign for transcripts,” Mamo said, adding, “I wish we had been there a few years ago, but I'm confident we're going to be able to roll this out by the end of the year.”
As previously reported in the
Kingstown, R.I.-based Embrace Home Loans was one of the lenders that participated in the pilot. Al Dussinger, Embrace’s executive vice president and chief technology officer, praised the initiative.
“Out of anything I've implemented over the past 20 years, nothing has gone this well,” he told the audience.
In addition to the announcing a tentative date for the e-sign program, IRS officials detailed plans on a second pilot program for an e-transcript initiative, an entirely new, automated process that would eliminate the need for borrowers to sign a 4506-T form entirely.
The e-transcript process is intended to be an additional option, rather than a replacement, for the wet- and e-signed 4506-T. The process would require borrowers to create an account on an IRS website using personally identifiable information the IRS has from tax returns. From there, borrowers will be able to request transcripts electronically.
A proof of concept will launch this summer with 10 technology vendors and a group of 20 mortgage lenders that span the breadth of the industry, including banks and nonbanks alike—and of different sizes, said Jim Weaver, IRS online services director of product management.
According to technology vendors familiar with the pilot, Chase Home Lending is the large lender participating in the program. Wells Fargo also has helped with the e-transcript development, but won’t join the test program until later.
