Proactive steps that were taken to avoid delays in mortgage loan applications.
After close to 35 days, this partial government shutdown is the longest on record. This shutdown was considered partial because it affected only federal agencies that hadn't yet had their appropriations funded by Congress. But some government departments, like the IRS, were able to find funding elsewhere to keep functioning.
From December 21 through January 7, National Credit-reporting System (NCS) partnered with key representatives of industry trade associations and the IRS Income Verification Express Service (IVES) Working Group members to recommend an alternative funding solution that IVES could support. Their proposal suggested that funding could be used directly from the Fee for Service Users fees all IVES participants pay for transcript service.
NCS’ long history in advocating risk mitigation initiatives with the IRS to improve system efficiency and customer service dates back to 1994. NCS continues to be influencers as members of the very first IRS Working Group (established in Q2 2018), including NCS executive Cecil Bowman (NCS SVP of Government/Industry Affairs) and Curtis Knuth (NCS President and CEO).
Along with advocating efforts from American Bankers Association, the Independent Bankers Association and the National Credit Union Association (NCUA), the IRS Working Group presented to various trade associations such as Mortgage Bankers Association (MBA) and the Consumer Data Industry Association (CDIA) to actively support getting the IRS to reopen IVES during the government shutdown.
Presentation of Concept.
The IRS Transcript Fee for Service could be funded entirely from the User Fees paid by IVES Participants. This concept was provided to the trade associations’ lead advocates to present to the Secretary of Treasury and the IRS. The Administration agreed to review the proposal with the Office of Management and Budget (OMB).
The OMB provides guidance and procedures to agencies on how User Fees are to be implemented and how the funds can be used. The bottom line: when it comes to any Agency charging a fee for a service, the cost of the fee cannot exceed the actual cost for providing the service end-to-end.
The IRS Restarts IVES.
After Treasury, OMB, and the IRS thoroughly reviewed the significant impact of shutting down IRS IVES processing due to lack of congressional funding, and they welcomed the proposal to utilize the User Fee reserve fund. They agreed that the funding could be transferred from the User Fee reserve fund to pay for essential IRS IVES employees to return to work. On Monday, January 7, 2019, IVES employees began to process the backlog of IRS Form 4506-T requests and also opened up their fax service to receive new applications.
Back on Schedule.
In conclusion, the IRS employees in the IVES units did a tremendous job in working through a 2-week backlog and, remarkably, IVES was back to the average turn time in several days. However, this turn time could change when IRS focuses on their number one core business of processing 2018 tax returns and issuing refunds.
A big shout out to the IRS, especially the IVES employees, for their hard work and dedication considering the circumstances.
J. Cecil Bowman, Senior Vice President of Government & Industry Affairs at NCS, is an expert in developing strategies for IVES vendors, lenders, and servicers to leverage the IRS processes in how income verification data is obtained from the IRS. He was the originating founder of the IVES concept, presenting the idea to the IRS Wage and Investment Commissioner back in Spring 2006. Bowman spearheaded IVES as Business Project Manager before its deployment on October 1, 2016- just in time for the banking meltdown of 2007-09
With 35 years leading many of the IRS IT initiatives as the IRS Information Technology Project Manager, he now leads NCS’ work with the IRS and the MBA to champion electronic improvements for the IRS form 4506-T.