Positive Real Estate Professionals

During the pre-approval stage of applying for a loan the information that a borrower gives the loan officer must be verified. For income information that cannot be verified by detailed paystubs that show deductions or two year’s worth of completed tax returns are not available, the borrower and loan officer can use the Tax Information Authorization (Form 8821).

This is a very simple form, though using it to obtain official tax returns can prolong the close of escrow. The basic information is generally auto-populated with the information taken off the Loan Application (1003) when it is printed if it has been integrated into the lender’s documents. If this information is not auto-populated, the borrower or loan officer will need to complete it.

Section one requires the name and address of the borrower, the borrower’s social security number, and a daytime phone number. Section two is completed by the loan officer or processor. Section three is where the borrower indicates the type of tax information requested, the tax form used, and the year or years of the return. Section four and five go together and are usually mutually exclusive. For the purposes of obtaining a home loan (a specific use), the borrower will generally check the box in section four and leave section five unchecked. Section six is very important if the borrower has not checked the specific purpose box in section four and has authorized tax information be provided on an ongoing basis.  If this box is checked other financial services providers (i.e. estate planners, tax professionals, etc.) with whom the borrower has a fiduciary relationship will have their authorization to receive these tax documents revoked. The last thing the borrower must do is sign their name and put the date in section section. Though this might sound complicated, it is really a very easy form to complete. And if you have questions or need help completing it, your loan officer should be quite qualified to advise you.