In a comment letter with nine trade associations on Friday, ABA urged the IRS to take immediate steps to fix problems with the tax transcript process that could result in significant delays for consumers attempting to purchase or refinance a home. The IRS recently made changes (including the incorporation of multifactor authentication) to its system for processing tax transcript requests, which lenders are often required to use to verify mortgage purchases or refinance transactions.
ABA is concerned that these changes could lead to a significant decrease in the number of transcript requests that can be processed per day, which could negatively impact consumers. “Extended processing times will result in delayed closings that will cause disruption and increase costs for consumers trying to purchase or refinance a home loan,” the associations pointed out in the letter. “Without an immediate resolution, we believe the IRS’ change will begin affecting consumers’ ability to borrow funds to purchase homes.”
While the groups acknowledged the need to protect consumer data, they noted that the IRS did not provide sufficient notice to the industry regarding the changes, and did not allow for testing of new systems or processes before they were formally announced. For more information, contact ABA’s Rod Alba.