IRS income verification helps credit unions battle fraud
by: Chuck Salvia, Vice Predsident, Computer Information Development LLC (CID)
Credit Unions now use an important governmental web-based service from the Internal Revenue Service called Form 4506-T; Request for Transcript of Tax Return. This helpful tool mitigates fraud with this IRS Income Verification program.
4506-T is
- An excellent method to shield your institution from fraudsters
- Used across multiple operational areas
- Beneficial for many purposes
- Automated online
Credit Unions use 4506-T service to verify up to four (4) years of income for individuals, corporations, and partnerships as a means to detect fraud. It provides governmental documentation for W-2’s, 1040’s, and 1099’s to strengthen your verification processes.
4506-T may be used to evaluate a borrower’s creditworthiness to obtain any type of loan, to verify the accuracy of the income amount stated on the loan application, and to verify the applicant’s or company’s past income.
Individuals – Transcripts of jointly filed tax returns may be furnished to either spouse. Only one signature is required.
Corporations – Generally, Form 4506-T can be signed by: 1) an officer having legal authority to bind the corporation, 2) any person designated by the board of directors or other governing body, or 3) any officer or employee on written request by any principal officer and attested to by the secretary or other officer.
Partnerships – Generally, Form 4506-T can be signed by any person who was a member of the partnership during any part of the tax period requested.
In the HR Department – Credit Unions are also using 4506-T in the Human Resource department to ascertain the income history of job applicants.
The IRS has automated the service which returns the results in 18 to 48 hours.
Your Credit Union can quickly request transcripts by using the automated service through an IRS enrolled company. Most of these enrolled services do not charge an upfront fee to use the program, only a charge per request.
Now is the time to add another weapon in your arsenal to battle fraud – direct to the IRS Income Verification service – while protecting your business interests.
Chuck Salvia is Vice President at Computer Information Development LLC (CID), a provider of fraud detection, prevention and remediation services to the financial community. He works with Credit Unions in the battle against fraud risk and associated losses through education, training, and providing access to the Social Security Administration’s Master File through their Consent Based Social Security Number Verification (CBSV) service and the IRS 4506-T Income Verification service.
Mr. Salvia is an active member of Credit Union Executives Society (CUES), and the National Association of Professional Background Screeners (NAPBS) where he’s co-chair of their Best Practices Government Identity Verification Systems sub-committee. He has given presentations on “Identity Verification Methods”, “Absolute Validation of Personal Identifiers”, “Credit Profile Numbers – Stolen SSNs”, and “SSN Randomization”.
