The American Bankers Association joined 10 financial sector trade associations Wednesday to urge lawmakers to pass a bill that would prevent the IRS from placing new restrictions on a government service used to confirm the income of borrowers when processing loan applications. In a joint letter to the leaders of the Senate Finance Committee and House Ways and Means Committee, the groups noted the IRS soon plans to restrict the use of Income Verification Express Service, or IVES, to lending operations for the sole purpose of obtaining a mortgage on residential or commercial real property. It also plans to no longer provide IVES to other government agencies.
IVES is currently used by consumer and commercial lenders and government agencies such as the Small Business Administration, making it an important tool to combat fraud and decrease the costs while increasing the speed of underwriting a loan, the associations said. Congress previously authorized the creation of the system, but since then, the IRS has thrown up several barriers to its use, they added. The groups urged lawmakers to pass H.R. 3335, the IRS eIVES Modernization and Anti-Fraud Act, which would ensure the agency follows the original intent of Congress.
“Several of our associations have met with the IRS several times to express our concerns with the agency’s implementation plans beginning in 2021,” the association said. “Since then, the IRS has continued to implement changes to the system without notice or regard for our concerns and has effectively made the system unusable, wasting more than $72 million in the process.”
