Document Updates: Docutech Changes for 4506-C Clean Version (Cx3095, Cx10144, Cx17841, Cx18927, and Cx18947)

On August 20, 2021, the IRS announced their plan to modernize Form 4506-C, also known as the Income Verification Express Service (IVES) Request for Transcript of Tax Return. This new IVES form is intended to enable the IRS to provide return transcripts, W-2 transcripts, and 1099 transcript information within 2-3 business days to a third party with the consent of the taxpayer. The IRS provided a draft form of the new 4506-C version, then later announced the finalized version and their mandatory effective date for the new version: March 1, 2023.

In preparation for the new 4506-C, First American Docutech is taking the opportunity to streamline and consolidate our existing array of 4506-C versions, as well as updating them to the October 2022 modernized version as provided by the IRS. Currently our standard and popular copies of the 4506-C are:

• Cx3095 – Standard form, prints one copy for each Borrower, excluding Guarantors; then prints up to three additional copies for each Borrower if either the loan level or borrower level indicator for that copy is set to ‘Yes’. Each request can have different values in sections 6 through 8, but otherwise the content of each request remains the same.
• Cx10144 – Assigned form, prints one copy per 1003.
• Cx17841 – Standard form for Corporations and self-employed Borrowers, prints one copy for each 4506-C Corporation that has a Return enabled, up to 10 Corporations; then prints an additional copy (up to 4) for each Corporation if the 4506 Corporate Return Request indicator for that copy is set to ‘Yes’. Each request can have different values in sections 6 through 8, but otherwise the content of each request remains the same, as detailed previously.
• Cx18927 – Assigned form, prints one copy for each “4506T Borrower [x] Additional Return [y] Taxpayer Full Name” populated, for each Borrower, up to 4 copies. Each copy uses fully custom fields – whatever is sent is what prints.
• Cx18947 – Assigned form, prints one copy for each Borrower whose “Print 4506-T” trigger field is not set to ‘No’; copies are combined if corresponding “Borrower [y] Is Spouse on 4506-T for Borrower [x]” is set to ‘Yes’. Basically allows clients to suppress copies as needed and to specify when to combine copies with next borrower.

Our intention is to update these three documents to the new “clean” format, then maintain them going forward:

1) cx3095, with options as outlined below; pulls information from standard loan data.

2) cx18927 for “Additional Returns”; prints information that is sent specifically for this doc.

3) cx17841 for Corporations.

We will also update these two documents to the new format, but afterwards will discontinue maintenance of them:

4) cx10144

5) cx18947

General Changes

The reason for discontinuing maintenance of Cx10144 and Cx18947 is that we are folding the functionality of those two documents into Cx3095. This means that as of March 1, 2023, the supported copies of the new 4506-C will be:

• Cx3095 – Intended for all clients who want to use any type of standard 4506-C functionality we offer.
• Cx17841 – Intended to remain as the standard form for Corporations/self-employed Borrowers.
• Cx18927 – Intended for any clients who wish to fully determine via direct import what prints on each copy and how many copies print for each Borrower, as it functions today.

While our Corporate (Cx17841) and direct import (Cx18927) copies of the 4506-C will be updated to the new version and the fields needed to support the new version, most of the changes are taking place within our standard copy, Cx3095. For all three of the maintained 4506-C documents, our field “Print IRS Form 4506-C Clean Version Indicator” (FI 156841) will be used to trigger the new October 2022 version.

To facilitate the incorporation of Cx10144 and Cx18947 into Cx3095, we have created a new field, 156023 “4506 Joint Taxpayer Behavior.” This field will be used within the document logic and the Multi-Document Collection (MDC) to trigger the proper text, fields, and document copies. The enumerations of 156023 are as follows:

1. 1003 Borrower – Uses 1003 logic; if “Additional Borrower Indicator” is ‘Yes’, combines Borrower + Coborrower copies into a single copy.

• • This is what 10144 currently does.

2. Joint Taxpayer – Uses the next borrower as the joint taxpayer when specified, else uses the spouse as the joint taxpayer when specified.

• • This is what cx18947 currently does.

3. None – Prints nothing for spouse.

• • This is what cx3095 currently does.

With the enhancements being made to Cx3095, Cx10144 and Cx18947 will no longer be needed – all functionality will be available in Cx3095 by making use of FI 156023 “4506 Joint Taxpayer Behavior.”  With that being the case, Cx10144 and Cx18947 are being retired. They will be updated to the new version and the fields needed to support the new version in order to facilitate the transition, but this will be the last standard update made to these two documents, and they will not be maintained after March 1, 2023.

Due to the exacting requirements from the IRS for the clean version of the 4506-C, we cannot print the ConformX branding and other footer items, including barcodes, on the main document. Instead, those items are being moved to a coversheet that will print with the 4506-C. This coversheet will print by default, but it can be suppressed using new field “4506 Print Coversheet” (FI 156024) if needed. If clients wish to retain customary header/footer information with the 4506-C, this coversheet will need to be utilized.

eSign Controls

As part of the new form functionality, we have created fields to allow for the eSigning of specific sections of the 4506-C, as needed. The document sections have been broken into eSign groups, with the following fields available to be used to control the following eSign groups:

• 4506 eSign Behavior – Taxpayer Information (Sections 1 – 4) (FI 156026) – Setting this to “eSign” will enable eSign controls for the Taxpayer Information sections.
• 4506 eSign Behavior – Signatures (FI 156029) – Setting this to “eSign” will enable eSign controls for the Signature section of the form. Note that this setting only controls eSign for the Phone number, Name, Title, and the “Authorized Representative” checkbox. The rest of the items (Signature, Date, and eSign signatory confirmation checkbox) are controlled via the normal document eSign settings/configuration.

It is anticipated that Lenders will largely be responsible for the population of Sections 5 through 8 through fields, but other eSign-related options may be available if the applicable Loan Origination System is not able to populate the fields.

Version Differences – September 2020 vs. October 2022

The significant changes entailed by the adoption of the October 2022 version include the following:

• The printing of the coversheet, which includes the header/footer information and barcodes, as well as the document title and a statement that reads:

Note: This document is included solely for the purpose of providing technical annotations for Form 4506- C, and should not be considered to be part of 4506-C, nor should this Coversheet be submitted to the Internal Revenue Service as part of Form 4506-C.

• The changing of the dates from the September 2020 to the October 2022 version, in both the header and the footer.
• The “Name shown on tax return” in Line 1a is now “Current name”, and has been split into three separate sections for first name, middle initial, and last name or Corporate/Business name.
• Line 1c was added – previous form printed Previous Address only, new form prints Previous Name as well.
• The spouse information for joint returns has been restructured to be to the right of the primary tax return name and information.
• 2c was added for Spouse Previous Name.
• The “Current name, address” for Line 3 has been split into four boxes for the “Current address” for the Street address, City, State, and ZIP code.
• Similarly, Line 4 “Previous Address” has been split into four boxes for the previous Street address, City, State, and ZIP code, as needed.
• Line 5a has been split into multiple boxes to separate the IVES participant name, IVES participant ID number, SOR mailbox ID, and the Street, City, State, and ZIP code for the associated address.
• Line 5c is a new optional “Unique identifier”, which up to 10 numeric characters. This can be used in conjunction with the “Customer file number” in Line 5b to identify a specific Return Request.
• Line 5d is a new section used to identify the Client name, Telephone number, and associated Street, City, State, and ZIP code address information.
• Line 6 has been reformatted to use checkboxes to identify whether the Request is for a Return Transcript, an Account Transcript, or a Record of Account.
• Line 7 has also been reformatted to allow for the requesting of up to three forms (if empty all forms will be sent by default), and to mark which taxpayers the wage and income transcripts are for (primary tax return name only, or spouse as well; both are provided if no box is checked).
• The Signature section guidance has been changed to specify that if both spouses’ information is entered into the form, both spouses must also sign the form. Previously only one spouse was required to sign.
• Additional checkboxes were added to the Signature section to indicate that “Form 4506-C was signed by an Authorized Representative” and “Signatory confirms document was electronically signed”. Please note that a representative can only sign Form 4506-C for a taxpayer if the taxpayer has specifically delegated this authority to the representative on Form 2848, line 5a, and Form 2848 is attached to the Form 4506-C request.

New Fields

Since there were hundreds of new fields created for these changes, lists of the new fields for Cx3095, Cx17841, and Cx18927 are available upon request.

Effective Date

While the mandatory effective date for the new clean version of the 4506-C is not until March 1, 2023, clients are encouraged to test and switch to the new version much sooner than that date. Mapping “Print IRS Form 4506-C Clean Version Indicator” (FI 156841) to ‘Yes’ will enable printing of the October 2022 version of the 4506-C. All changes to Cx3095, Cx10144, Cx17841, Cx18927, and Cx18947 are on Stage servers for testing, and will be available on Production after the ConformX Software release scheduled the evening of December 2, 2022. If you have any question or concerns about these changes, or if you use a different custom copy of IRS Form 4506-C and would like to move to a standard form or update your custom form, please contact your Client Relationship Manager directly or contact our Client Support Team at 1.800.497.3584.

DR-135694
COM-488

UPDATE 

The new clean version of the 4506-C standard forms will be available for ink sign use in ConformX Production starting December 3, 2022.   

Depending on signature length, the eSignature may partially overwrite the “Signature for Line 1a (see instructions)” or “Spouse’s signature (required if listed on Line 2a)” labeling of the new form. Therefore, the eSignature functionality of the clean version of the form will be disabled until the February 2023 ConformX/Solex software release. At that time the signature size will be modified to fit in the allotted clean copy area.

UPDATE 2

Due to client request, we are expanding support for Cx18927 “Additional 4506-T/4506-C (Copy of Tax Form).” Currently the document prints up to 4 Requests for each Borrower, but we have been asked to support up to 6 Requests for each Borrower. To accomplish that, we are adding 63 fields for each of “4506T Borrower 1 Additional Return 5” and “4506T Borrower 1 Additional Return 6,” and also updating the existing Multi-Doc Collection logic to print 6 copies instead of 4.

UPDATE 3

Due to client request, we are expanding support once again for Cx18927 “Additional 4506-T/4506-C (Copy of Tax Form).” Currently the document prints up to six Requests for each Borrower, but we have been asked to support up to ten Requests for each Borrower. We have added fields for each of Additional Return and updated the existing Multi-Doc Collection logic to print up to ten copies instead of six.

The preceding is for informational purposes only and is not and may not be construed as legal advice. No third-party entity may rely upon anything contained herein when making legal and/or other determinations regarding its practices, and such third party should consult with an attorney prior to embarking upon any specific course of action.