MISMO seeks standard ways to handle new IRS tax transcript mandate
The Mortgage Industry Standards Maintenance Organization is working with stakeholders to come up with a common means of handling new tax transcript authorization requirements in the Taxpayers First Act.
The new requirements must be implemented by anyone asking the taxpayer for this information, including mortgage lenders, by Dec. 28.
"It is important for the mortgage industry to develop a consensus solution to ensure compliance with the new law," Rick Hill, executive vice president of MISMO and vice president of technology at the Mortgage Bankers Association, said in a press release.
"Given the likelihood that many different industry functions may be affected by this requirement, MISMO is seeking collaboration from the industry to avoid any unnecessary disruption to lenders, servicers and consumers ahead of the December deadline."
Mortgage companies request access to tax transcripts to help determine borrowers' ability to repay, which lenders became liable for post-crisis.
To date, the Internal Revenue Service has not provided specific guidance as to how the taxpayer consent should be obtained.
Among the items MISMO is interested in coming up with are standard methods, forms, language and tactics that could be used to fulfill the new mandate.
The organization will make its standards available for public comment when they are complete, but MISMO only allows its members to vote on whether to approve them.
President Trump signed the Taxpayer First Act into law on July 1.
In addition to adding new consumer authorization requirements for tax transcripts, the new law aims to help the Internal Revenue Service modernize its aging information technology.
To fund the modernization, the IRS will charge a separate user fee over a two-year period on all requests for transcripts made through its Income Verification Express System.