What is Form 4506-T and when is it used?

• A. IRS tax transcript request used to verify income by obtaining tax return data from the IRS.
• B. A form to request property tax records from local assessor.
• C. A form to authorize credit inquiry.
• D. A form for mortgage insurance cancellation.

Answer: (A)

Form 4506-T is the IRS tax transcript request that lenders use to verify a borrower’s income. When a borrower signs this form, they authorize the IRS to release tax return transcripts to the lender. Those transcripts summarize the data from filed tax returns (such as adjusted gross income and other lines used to support income), but they aren’t full copies of the tax returns. This helps underwriters confirm income reported on the loan application, which is especially important for self‑employed borrowers or when income needs stronger verification. It’s not about obtaining property tax records, it’s not about authorizing a credit inquiry, and it isn’t used for mortgage insurance cancellation.