Looking Back to Move Loans Forward
In today’s lending environment, underwriters face tighter investor requirements, higher compliance expectations, and increasing pressure to close quickly. At the same time, income documentation is more complex than ever — especially when borrowers rely on variable income, commissions, bonuses, or self-employed earnings.
That’s why 4506-C Tax Return Verification continues to play an important role in modern underwriting. When lenders need a clearer view of income history and accuracy, verifying what’s on file with the IRS can provide the confidence needed to move forward.
Birchwood’s 4506-C Tax Return Verification helps lenders confirm applicant tax transcript data through compliant sources — reducing risk and preventing last-minute surprises.
Learn more: birchwoodcreditservices.com
What Is Form 4506-C?
Form 4506-C is the IRS authorization form that allows a borrower to request that tax return transcript information be shared with a third party (such as a lender). It’s commonly used through the IRS Income Verification Express Service (IVES) to validate income details and confirm the accuracy of borrower-reported information.
Instead of relying solely on borrower-provided documents, lenders can use 4506-C verification to cross-check income history and identify inconsistencies that may require further review.
Why Verification Still Matters
Borrowers don’t always misstate income intentionally — but whether it’s accidental or not, inaccuracies create risk.
In today’s market, underwriters often review:
- paystubs and W-2s
- bank statements
- employer documentation
- borrower declarations
But short-term documentation may not tell the full story — especially when income fluctuates or when borrower-provided paperwork is incomplete. 4506-C verification adds another layer of visibility into income history and helps underwriters make more confident decisions.
Key Benefits of 4506-C Verification
When used strategically, tax transcript verification supports stronger underwriting outcomes.
1) Increased underwriting confidence
IRS transcript data provides a reliable point of comparison when reviewing borrower income history.
2) Reduced income misstatement risk
4506-C verification can help identify mismatches between borrower-submitted information and IRS records — helping lenders catch potential issues early.
3) Fewer last-minute conditions
When tax transcript questions are addressed early, lenders can avoid late-stage rework, conditions, and documentation requests.
4) Better QC and audit readiness
Many lenders and investors require strong documentation trails. Transcript verification supports file integrity and helps reduce post-close concerns.
When 4506-C Matters Most
4506-C verification is valuable across many files, but it’s especially important in risk-sensitive scenarios such as:
- Investor-required loans
- Self-employed or complex income borrowers
- Variable income, commission, or bonus trends
- QC and audit-heavy files
- High-balance or elevated-risk loans
In these cases, verification isn’t a slowdown — it’s a tool that prevents surprises and protects turnaround times.
How Birchwood Helps
Birchwood’s verification services are built to deliver reliable results with less manual burden for lender teams.
With Birchwood, lenders can expect:
- Fast, accurate verification workflows
- Reliable, compliant data sourcing
- Reduced back-and-forth and rework
- Stronger confidence in underwriting decisions
When underwriting teams have trusted verification early in the process, they can move files forward faster — and with fewer disruptions later.
Short-term documentation isn’t always the full picture. When lenders need clarity on income history and verified transcript data, 4506-C Tax Return Verification provides an important layer of confidence.
If you’re looking to reduce fraud exposure, improve underwriting accuracy, and prevent surprises that delay closings, Birchwood’s 4506-C verification can help.
Learn more at birchwoodcreditservices.com or call 800-910-0015.
