Procedural Notice 5000-829416 Use of IRS Form 8821
Summary
SBA Procedural Notice, control no. 5000-829416, effective March 9, 2022, addressed to SBA employees and SBA Lenders, revising the financial information verification procedures in SOP 50 10 6 for 7(a) and 504 loans. It allows SBA Lenders to use either IRS Form 4506-C, IVES Request for Transcript of Tax Return, or IRS Form 8821, Tax Information Authorization, to verify borrower financial information. The notice explains that the IRS had temporarily suspended Form 4506-T requests through its Income Verification Express Service (IVES) under the COVID-19 Emergency Declaration, and that SBA's temporary procedures in Procedural Notices 5000-20016, 5000-810037 and 5000-813848 expired on September 30, 2021.
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SBA Procedural Notice
TO: All SBA Employees and SBA Lenders CONTROL NO.: 5000-829416
SUBJECT: Revisions to SOP 50 10 6 Financial
Information Verification Procedures to Allow for EFFECTIVE: March 9, 2022
the Use of IRS Forms 4506-C or 8821 for 7(a) and
504 Loans
The purpose of this Notice is to revise the procedures set forth in SOP 50 10 6 relating to the Tax
Transcript/Verification of Financial Information process Lenders and Certified Development
Companies (CDCs) (collectively, “SBA Lenders”) use to verify small business borrower
financial information (“financial information verification”). Effective with the date of this
Notice, SBA Lenders may use either IRS Form 4506-C, IVES Request for Transcript of Tax
Return, or IRS Form 8821, Tax Information Authorization, for purposes of financial information
verification.
Due to the COVID-19 Emergency Declaration, the IRS temporarily suspended its acceptance of
IRS Form 4506-T tax return transcript requests through the IRS Income Verification Express
Service (IVES). To accommodate this suspension, SBA established temporary procedures for
SBA Lenders to verify small business borrower financial information. These temporary changes
to the financial information verification procedures were described in SBA Procedural Notice
5000-20016 (April 8, 2020), extended by SBA Procedural Notice 5000-810037 (April 22, 2021)
and SBA Procedural Notice 5000-813848 (June 30, 2021), and expired on September 30, 2021.
Accordingly, as of October 1, 2021, SBA Lenders were required to follow the financial
information verification procedures as described in SOP 50 10 6.
As stated above, the purpose of this Notice is to revise the procedures set forth in SOP 50 10 6 to
allow SBA Lenders to satisfy financial information verification by filing either IRS Form 4506-
C or IRS Form 8821. This Notice also revises procedures set forth in SOP 50 10 6 to clarify that,
in keeping with the changes described by this Notice, SBA Lenders must retain the IRS form
used for financial information verification in the SBA Lender file.
The procedures in SOP 50 10 6 (effective October 1, 2020) preceded IRS issuance in September
2020 of a new IRS Form 4506-C and discontinuance of the IRS Form 4506-T for financial
information verification through IVES after February 28, 2021. See SBA Information Notice
5000-20068 (December 11, 2020). Therefore, this Notice also replaces all references in SOP 50
10 6 to the IRS Form 4506-T with IRS Form 4506-C, IVES Request for Transcript of Return.
PAGE 1 of 2 EXPIRES: 3/1/23
SBA Form 1353.3 (4-93) MS Word Edition; previous editions obsolete
Must be accompanied by SBA Form 58
Federal Recycling Program Printed on Recycled Paper
Revised Procedures for Financial Information Verification in SOP 50 10 6
Financial Information Verification via IRS Form 4506-C
The procedures in SOP 50 10 6, Part 2, Section A, Paragraph B. for verifying financial
information remain the same, except the reference to IRS Form 4506-T is replaced by IRS Form
4506-C. SBA Lenders must follow IRS Form 4506-C Instructions or risk rejection of the request
by IRS.
Financial Information Verification via IRS Form 8821
SBA Lenders may instead obtain tax return information by fully completing and submitting IRS
Form 8821. SBA Lenders must ensure the type of transcript requested contains any changes to
the original return, if filed by the small business borrower. The SBA Lender must be listed as
designee in Line 2 of IRS Form 8821. SBA will not permit the borrower or its own tax preparer
or enrolled agent to file IRS Form 8821 for purposes of financial information verification in
connection with an SBA-guaranteed loan. SBA Lenders must follow the IRS Form 8821
Instructions or risk rejection of the request by IRS.
As stated in the IRS Form 8821 Instructions, when the box on line 4 of the IRS Form 8821is
checked, the IRS Form 8821 authorization request will apply only to the specific loan application
and will not revoke any prior authorizations provided by the taxpayer.
Retention of IRS Form 4506-C or IRS Form 8821 in SBA Lender File
This Notice also revises the document retention guidance throughout SOP 50 10 6 to include the
IRS Form 8821, if used by the SBA Lender to verify small business borrower financial
information. SBA Lenders must retain in their loan file whichever IRS form was used for
purposes of financial information verification.
These procedural changes will be incorporated into the next update of SOP 50 10.
Questions
Questions on this Notice may be directed to the Lender Relations Specialists in the local SBA
Field office.
Dianna L. Seaborn
Director
Office of Financial Assistance
PAGE 2 of 2 EXPIRES: 3/1/23
SBA Form 1353.3 (4-93) MS Word Edition; previous editions obsolete
Must be accompanied by SBA Form 58
Federal Recycling Program Printed on Recycled Paper
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