IRS Modernization: Bipartisanship Still Exists
This week a team of bipartisan Members of Congress and Senators introduced legislation to modernize an antiquated process used by the IRS to verify income. As our CEO Trevor Dryer discussed in a BankThink article for the American Banker, pulling a tax transcript to verify income of a small business involves faxing and mailing, while the rest of the world has moved to automated, computer assisted methods of communications. This method of verifying income through the IRS 4506-T form causes delays in the underwriting process for small businesses slowing their access to needed credit.
When the need for capital is immediate, waiting a few days to weeks for an income verification is not an option forcing small businesses to use their personal credit cards, borrow money from family & friends or turn to alternative lenders who charge much higher interest rates, but can deposit the funds within a day. Automating the process of income verification through the 4506-T form allows for instant validation of information and eases the time burden of collecting documentation for loan underwriting. Should the bill introduced by Congressmen Patrick McHenry (R, NC-10) and Earl Blumenauer (D, OR-03) in the House of Representatives and by Senators Corey Booker (D-NJ) and Mike Crapo (R-ID) become law, the ability for traditional lenders to quickly process and approve small business loans will greatly improve.