The IRS last week said it would postpone policy updates to the Income Verification Express Services program. IVES allows taxpayers to authorize third parties to request their tax return or wage transcripts to obtain a residential or commercial mortgage. Participants can include banks, credit unions, mortgage brokers and others servicing clients within the mortgage lending industry.
The agency announced a policy change on Jan. 2 that it would limit use of IVES to verification of tax transcript data only for purpose of obtaining a mortgage on residential or commercial real property. The IRS said these changes now would be suspended while it seeks input from stakeholders. In January, the American Bankers Association joined a group of trade associations urging lawmakers to pass legislation to keep the IRS from placing new restrictions on IVES. IRS had also planned to cease providing IVES to other government agencies, but it has informally announced that government agencies will enter into separate agreements to continue receiving IVES transcripts. IVES is currently used by consumer and commercial lenders and government agencies such as the Small Business Administration.
“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,” the associations wrote in their January letter to lawmakers.
