Earlier this year, Congress passed the Taxpayer First Act (133 Stat. 981 [2019]; see https://www.congress.gov/bill/116th-congress/house-bill/3151/text?q=%7B%22search%22%3A%5B%22taxpayer+first+act%22%5D%7D&r=1&s=8#toc-H41D3744607B44119A2D000B89E5119D2), Section 2202 of which amends 26 U.S.C.A. § 6103(c) to require, within the context of a taxpayer requesting a copy of the taxpayer’s tax returns, the following:
“The Secretary may, subject to such requirements and conditions as he may prescribe by regulations, disclose the return of any taxpayer, or return information with respect to such taxpayer, to such person or persons as the taxpayer may designate in a request for or consent to such disclosure, or to any other person at the taxpayer’s request to the extent necessary to comply with a request for information or assistance made by the taxpayer to such other person. However, return information shall not be disclosed to such person or persons if the Secretary determines that such disclosure would seriously impair Federal tax administration. Persons designated by the taxpayer under this subsection to receive return information shall not use the information for any purpose other than the express purpose for which consent was granted and shall not disclose return information to any other person without the express permission of, or request by, the taxpayer.”
MISMO® provides an analysis of this amendment (see http://www.mismo.org/standards-and-resources/additional-tools-and-resources/taxpayer-consent-language). This amendment takes effect on December 28, 2019.
We are currently reviewing this change to determine any impact to our document library and/or systems and evaluating any necessary changes. Any modifications we make will be announced on our website (https://compliance.docutech.com/).
UPDATE: On November 6, 2019 FNMA issued a “Selling and Servicing Notice” concerning “The Taxpayer First Act” (notice is available at: https://www.fanniemae.com/singlefamily/news). The Notice mentions the draft of the MISMO® sample “Taxpayer Consent Form”, but states that “[s]ellers/servicers may also prepare their own taxpayer consent form, as long as the form provides the seller/servicer with express permission to share tax return information in accordance with the law.”
Also, FNMA states the following:
“Because the law becomes effective on December 28, 2019, sellers should obtain signed taxpayer consent forms from borrowers in connection with all loans that are sold to or securitized by Fannie Mae on or after that date.”