Over the past several weeks, we have had multiple discussions with our clients regarding the amended provision to Section 2202 of the Taxpayer First Act of the Internal Revenue Code section 6103 (c) (which went into effect on December 28, 2019) requiring the taxpayer to provide consent for the express purpose for which their tax information will be used and shared with other parties.

In light of the discussions with our clients, we are providing the following sample consent language. When determining the form of implementation of the consent language lenders should be mindful to obtain consent from all necessary parties, which may include borrowers, guarantors, and sellers.

SAMPLE TAXPAYER CONSENT LANGUAGE
“The undersigned hereby understands, acknowledges, and agrees that ____________________________________ (“Lender”) and the other “Receiving Parties”, as hereafter defined, are authorized to obtain, use and share the undersigneds tax return information for purposes of (i) providing a loan proposal; (ii) originating, maintaining, managing, monitoring, servicing, selling, insuring, or securitizing a loan and all collateral for any such loan; (iii) marketing purposes; or (iv) as otherwise permitted by applicable laws, including state and federal privacy and data security laws. The term “Lender,” as used above, includes Lender’s affiliates, agents, (including, but not limited to, attorneys, accountants, appraisers, brokers and lender service providers), and any of aforementioned parties’ respective successors and assigns. The term “Receiving Parties,” as used above, includes (i) any actual owners of a loan resulting from a loan application or guarantee thereof, as applicable, (ii) any potential purchasers of a loan resulting from a loan application or guarantee thereof, as applicable, or (iii) any acquirers of any beneficial or other interest in the loan (including, but not limited to, the United States Small Business Administration), any mortgage/title insurer, guarantor, any servicers or service providers for the forgoing parties and any of aforementioned parties’ respective successors and assigns.”

It is important to note that the aforementioned Taxpayer First Act consent requirements do not apply solely to federally guaranteed loan programs. Please contact Your SBA Legal Department® at SBAQuestions@JellumLaw.com with any additional questions.