SBA Procedural Notice 5000-20016: Changes to 4506-T Tax Transcript Verification Procedures during the COVID-19 Emergency, April 8, 2020
Summary
SBA Procedural Notice 5000-20016, effective April 8, 2020, changing how SBA lenders verify borrowers' tax information during the COVID-19 emergency after the IRS closed its Taxpayer Assistance Centers and suspended new IVES requests. If a lender has sent IRS Form 4506-T and has no answer within 10 business days, or cannot send it because of the suspension, it may close and disburse the 7(a) or 504 loan. The lender must then follow up with the IRS, keep a dated copy of each request in its file and complete the verification once the transcript arrives.
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Full text
SBA Procedural Notice
TO: All SBA Employees, 7(a) Lenders, and CONTROL NO.: 5000-20016
Certified Development Companies
SUBJECT: Changes to 4506-T Tax Transcript EFFECTIVE: April 8, 2020
Verification Procedures during the COVID-19
Emergency
On March 13, 2020, President Trump declared the ongoing Coronavirus Disease 2019 (COVID-
19) pandemic of sufficient severity and magnitude to warrant an emergency declaration for all
States, territories, and the District of Columbia (COVID-19 Emergency Declaration). The
purpose of this Notice is to advise SBA Lenders (including 7(a) Lenders and Certified
Development Companies (CDCs)) of changes to the 4506-T tax transcript verification
procedures during the COVID-19 emergency.
In response to the COVID-19 Emergency Declaration, the Internal Revenue Service (IRS) has
notified users of the IRS Income Verification Express Service (IVES) Program that the IRS has
temporarily closed all Taxpayer Assistance Centers and discontinued face-to-face service
throughout the country until further notice. The IRS also has temporarily suspended acceptance
of new IVES work at this time as they adjust to the impact of state and local stay-at-home orders.
IRS has also stated that they will keep all users posted of any updates to this status.
SBA understands the IRS suspension of accepting new 4506-T tax return transcript requests
though IVES is a temporary measure and is expected to last until further notice. SBA recognizes
this IRS temporary suspension of services will affect the ability of SBA Lenders to comply with
the Loan Program Requirements to verify financial information of the Borrower prior to the first
disbursement of loan proceeds (for a 7(a) loan) and prior to submitting the closing documents to
SBA Counsel (for 504 loans).
In an effort to minimize the impact of the IRS suspension and to ensure that loan proceeds are
disbursed to small businesses as soon as possible, SBA is providing temporary procedural
guidance relating to the verification of financial information for SBA Lenders. The temporary
guidance set forth below replaces the guidance related to the timing of verification of financial
information that is in SOP 50 10 5 K Subpart B, Chapter 5, Paragraph IV.D.1. (for 7(a) loans)
and Chapter 7, Para. IV.I.3 (for SBA Express, Export Express, and 7(a) Small Loans), and
Subpart C, Chapter 5, Paragraph I.E.1 (for 504 loans).
PAGE 1 of 2 EXPIRES: 4-1-2021
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
Effective with the date of this Notice and until further notice, all SBA Lenders, must follow the
procedures set forth below to verify the Applicant’s financial information provided in connection
with a 7(a) or 504 loan:
If the SBA Lender has submitted IRS Form 4506-T to the IRS and has not received a
response from the IRS or the copy of the tax transcript within 10 business days or is
unable to submit the IRS Form 4506-T due to the temporary suspension of IRS
acceptance of the form, the SBA Lender:
i. May proceed to close and disburse the loan;
ii. Must follow-up with the IRS to obtain and verify the tax data by submitting IRS Form
4506-T or by resubmitting a copy of the IRS Form 4506-T to IRS with the notation
“Second Request” in the top right hand side, as applicable;
iii. Must document its file with a dated copy of the submission/second submission, as
applicable; and
iv. Must perform the verification and resolve any significant differences discovered as
soon as the IRS response is received, but in no event later than 6 months from the date of
the Note.
Under current circumstances, if an SBA Lender is unable to submit the 4506-T to the IRS, the
SBA Lender must obtain a certification from the Applicant that the tax information provided to
the SBA Lender is identical to what was submitted to the IRS.
SBA appreciates your patience as we navigate through numerous different challenges in this very
rapidly changing environment.
If you have any questions regarding this notice, please contact your local SBA field office or the
service centers. To locate your local office or service center, please go to
https://www.sba.gov/about-sba/sba-locations.
Dianna L. Seaborn
Director
Office of Financial Assistance
PAGE 2 of 2 EXPIRES: 4-1-2021
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
File and source
- File
- 5000-20016_-_4506-T_Tax_Transcript_Verification_Procedures_during_the_COVID-19_Emergency.pdf
- Size
- 82,095 bytes
- SHA-256
- e5f1c4a3893eabe11f40978136b8db6d7d6f36fb326ce351f0d31b41f90a86b2
- Our copy
- 5000-20016_-_4506-T_Tax_Transcript_Verification_Procedures_during_the_COVID-19_Emergency.pdf
- Original
- www.sba.gov