Short answer
Form 4506-C lets your lender request transcripts of your tax returns directly from the IRS, so it can confirm the income you're qualifying with. Fannie Mae requires each borrower whose income is used to sign one at or before closing, unless all of that borrower's income was validated electronically. It only allows the specific transcripts and years listed on the form.
What does the form do?
IRS Form 4506-C is a request for tax transcripts sent through the IRS's income verification service. Fannie Mae's Selling Guide (B3-3.1-02) says it can cover up to four years or tax periods and stays valid for 120 days after you sign. Only one type of tax form can be requested per 4506-C, so a self-employed borrower may sign one for personal returns and another for business returns.
Fannie also says you shouldn't be asked to sign it until the form is filled in, including the transcript type, the years and the date. Check those before you sign.
Why is it needed if I already sent my tax returns?
Transcripts confirm that the returns in your file match what was filed with the IRS. A lender can also use a signed 4506-C, proof of electronic filing or IRS transcripts in place of your signature on a tax return copy. For FHA loans, HUD's Handbook 4000.1 lets a lender skip some past-employment paperwork for a borrower qualifying on base pay with a two-year history, if the borrower signs a 4506, 4506-C or 8821 for the previous two tax years.
Which tax year counts as "most recent"?
Fannie defines the most recent return as the last one scheduled to have been filed with the IRS. Early in the year, before the filing deadline, that may still be the prior year's return. If you're on an IRS extension, tell Tom early, since lenders adjust for extensions only when you're eligible for them and the file always needs your last filed return.
Why do they keep asking for newer documents?
Fannie Mae requires credit, income, employment and asset documents to be no more than four months old on the note date. If your closing moves, you may be asked for a newer pay stub or bank statement. See what happens after you apply and letters of explanation.
Sources
- Fannie Mae Selling Guide, B3-3.1-02, Tax Return and Transcript Documentation Requirements (06/03/2026)
- Fannie Mae Selling Guide, B1-1-03, Allowable Age of Credit Documents and Federal Income Tax Returns (04/02/2025)
- HUD Single Family Housing Policy Handbook 4000.1, Update 18 (August 2026), Past Employment Documentation
Checked November 2, 2026. Rules and dates change, so confirm current details before you rely on them.
General information only, not tax or legal advice. Program availability, eligibility and terms vary by lender and are subject to change and to underwriting approval. Not a commitment to lend.