I see in the comment to 1026.43(c)(4), a creditor may obtain a copy of a tax return transcript or a filed tax return directly from the consumer or from a service provider. I have heard from a couple of sources that if we obtain a tax return from the consumer, it must be one that was prepared by a third party, such as a CPA. If the tax return was self-prepared by the consumer, then it would not meet the "third party" test of "verifying information using reasonably reliable third party records". In other words, for self-prepared tax returns, we would need to obtain an IRS tax return transcript to verify that information. Is this true?

I prepare and file my tax return myself through TurboTax. You can see that those have been "filed". I think it just depends.

So you think a copy of a TurboTax prepared tax return is third party? I'm confused by that statement, can you clarify? How does it depend?

I thought self prepared, whether in Turbotax or by hand, would require us to get a transcript to have a third party record.

No?

What difference does it make who prepares the return. My CPA would put the same numbers on my tax return as I do. The idea is do you have a return in your hands that was actually filed with the IRS. I get a electronic certification of filing with my turbotax documentation, hence it would meet "a filed tax return directly from the consumer".

I paraphrase below from other materials...
As part of the General ATR, a creditor must verify a consumer's repayment ability using reasonably reliable third-party records.
Third-party record means:
1) a document or other record prepared or reviewed by an appropriate person OTHER than the consumer, creditor, or broker...
2) a copy of a tax return filed with the IRS
3) ....."

So you are saying that even though the document was prepared by the consumer, as long as you obtain a copy of it after it was filed with the IRS that it doesn't matter that it was prepared by the consumer.?

Yes. You said it yourself in the definition you quoted from 1026.43(b)(13)(ii)

Also..

A creditor may verify the consumer's income using a tax- return transcript issued by the Internal Revenue Service (IRS). Examples of other records the creditor may use to verify the consumer's income or assets include:

(i) Copies of tax returns the consumer filed with the IRS or a State taxing authority;

Got it, thanks to you both