Underwriting Q & A | Are there any tricks when a title agent needs information from the Internal Revenue Service (IRS) regarding a party to a real estate transaction?

Q: Are there any tricks when a title agent needs information from the Internal Revenue Service (IRS) regarding a party to a real estate transaction?

A: Earlier this year, the IRS instituted a new identity verification process requiring third parties calling on behalf of a taxpayer to verify their identity by providing personal information such as their Social Security Number and date of birth. Changes made to the Internal Revenue Manual Section (IRM) 21.1.3.3, titled “Third Party (POA/TIA/F706) Authentication, also require anyone who calls the IRS to provide their name, company’s taxpayers identification number (TIN) and their Centralized Authorization File (CAF) number. Previously, callers only had to provide their name and company TIN.

According to reports, the additional information is being requested to fight fraud and mitigate risk. The change came without warning and the IRS has not yet provided an update to the IRM on its website. Reports are the IRS plans to detail changes in the near future.

To eliminate multiple employees from submitting their personal information, some title companies have appointed a point person within its company to be the main contact with the IRS. Some alternative solutions that don’t require as much information from the caller include providing certain digits of their SSN, inputting the SSN on a phone keypad rather than verbally stating the number or answering a series of security questions.

For reading pleasure, the link to the above-referenced section of the IRS Manual is https://www.irs.gov/irm/part21/irm_21-001-003r#idm139899900814464

Source: “Title News Online”, the official publication of the American Land Title Association, February 27, 2018, edition.