January 15, 2020
By Caity Witucki
Contributing Editor, Coleman’s SBA Compliance Report
Coleman’s SBA Compliance Report — Updates to SBA Form 912 and 4506 Processing
The second page of SBA Form 912 has been updated to clarify the Paperwork Reduction Act and the Privacy Act Statement. No changes have been made to the first page.
The Changes to SBA Form 912 specifically address the following issues:
The Paperwork Reduction Act for Form 912
The estimated time for completing the Form now specifies that it includes reviewing the instructions, gathering the information needed, and completing the responses. Additionally, the address for submitting comments about the Form is now Small Business Administration, Director, Records Management Division, 409 3rd St., S.W., Washington D.C. 20416 or Desk Officer for the Small Business Administration, Office of Management and Budget, New Executive Office Building, Room 10202, Washington, D.C. 20503.
Privacy Act Statement for Form 912
The first paragraph under the Privacy Act heading on page 2 of the Form has been removed. SBA Form 912 no longer addresses requests for copies of personal information that the SBA has on file. Additionally, information under the Privacy Act Statement is now organized into three subheadings and clarifies that the request is permitted under EO 9397.
Processing Form 4506
Processing procedures for Form 4506 has also been changed. According to the SBA, 7(a) Lenders and CDCs must obtain tax return transcripts through the IRS’s Income Verification Express Service (IVES) program.
Currently, only the March 2019 version of IRS Form 4506-T is compatible with IVES. (Note: Although the IRS has a more recent version of the form on its website, it is not compatible with IVES).
Written Borrower consent requirements for Form 4506
The Taxpayer First Act, Section 2202, now requires 7(a) Lenders and CDCs to obtain written borrower consent to use tax return information. This impacts all lending business, regardless of whether it is for SBA. The SBA recommends that 7(a) Lenders and CDCs contact their legal counsel for guidance on how to comply.