MISMO Issues Taxpayer Consent Language as Solution for New IRS Requirement on Sharing Tax Transcripts
MISMO, the mortgage industry standards organization, issued its Taxpayer Consent Language, which permits lenders to share tax information received from the Internal Revenue Service with other parties involved in a mortgage transaction.
MISMO’s Taxpayer Consent Language was created to provide a consistent way for the mortgage industry to comply with the Taxpayer First Act. The new law, which passed in July and goes into effect on December 28, requires the taxpayer to provide consent for the express purpose for which their tax information will be used. Additionally, the taxpayer must also provide consent for their tax information to be shared with other parties.
In August, MISMO sought industry collaboration to draft consent language, which was then released for a 30-day public comment period that remained open through October 20, 2019 (https://www.mba.org/2019-press-releases/august/mismo%C2%AE-seeks-input-on-consent-language-for-tax-transcripts-to-comply-with-taxpayer-first-act).
“The MISMO community should be commended for coming together to develop useful and clear consent language to ensure compliance with the new law,” said Suzanne Garwood, Assistant General Counsel with JPMorgan Chase. “The collaboration throughout the process, including the feedback received during the 30-day comment period, was instrumental in ensuring that model language was finalized ahead of the law’s December 28 implementation date.”
The Taxpayer Consent Language is issued as a Candidate Recommendation, which means the standard has been thoroughly reviewed by a wide range of organizations and industry participants. It is now available at no charge for broad use across the entire residential mortgage industry.
“Mortgage lenders need to be aware of this new law and take steps now to ensure compliance,” said Rick Hill, Executive Vice President of MISMO and MBA Vice President of Technology. “We expect widespread industry adoption of this consent language, and are appreciative of the tremendous teamwork that went behind this effort.”
The Taxpayer Consent Language can be accessed at: http://www.mismo.org/standards-and-resources/additional-tools-and-resources/taxpayer-consent-language. Industry participants who have comments or questions about the Taxpayer Consent Language can contact MISMO at email@example.com. Written guidance to assist in utilizing the model language will be released at a later date.
The requirement to obtain taxpayer consent to share their tax data is new and distinct from the existing IRS Request for Transcript of Tax Return (e.g. 4506T). The 4506T requires taxpayer consent for the IRS to provide the tax transcript to the lender or other requesting party.
Release and use of MISMO standards and other resources, including the proposed taxpayer consent language, are governed by the MISMO Intellectual Property Rights Policy. For more information on the MISMO IPR policy and related licenses, please click http://www.mismo.org/x242632.
For more information about MISMO, visit www.mismo.org.