LENDERS AND IRS TEAM UP
If you are applying for a mortgage or other loans be aware that the Internal Revenue Service and California mortgage lenders are teaming up to verify income reported on loan applications of Self-Employeds. The lenders will be notified in two days whether the income listed by self-employeds matches Internal Revenue Service's records.
In addition, the Internal Revenue Service will be investigating discrepancies and will 'take a look' when a self-employed person puts down more income on the loan application than on the return.
Although this program is now limited to self-employeds applying for mortgages, you may be asked in other mortgage or loan situations, including student loans applications, to sign a "Request for Copy of Tax Form", Form 4506, which would allow your potential lender to request and receive a copy of the returns you actually filed for up to the last three years.
In all cases when you are applying for loans or other types of credit "READ WHAT YOU SIGN"