Anyone know of a reason why I should not transfer a copy of the tax transcript we obtained for a loan application to the new lender the applicant decided to switch to - with the applicant's written permission of course? I can't find anything from the IRS or GSAs that address this issue at all. I don't want to withhold them just because the applicant went elsewhere because, hey that's life in the mortgage biz but I don't want to violate some rule just being the nice guy and helping out a former customer. I've never had this come up before so I was wondering if there is something I am missing.

From the 4506-T form:

Caution: If the tax return is being mailed to a third party, ensure that you have filled in lines 6 and 7 before signing. Sign and date the form once you have filled in these lines. Completing these steps helps to protect your privacy. Once the IRS discloses your tax return to the third party listed on line 5, the IRS has no control over what the third party does with the information. If you would like to limit the third party's authority to disclose your return information, you can specify this limitation in your written agreement with the third party.

Thanks rlcarey. I did read that while trying to determine if this is OK but the way I read that is that the IRS is saying they don't have any control over what we do with it once we get it but I don't read that to mean whatever we do with it is permissible I want to be sure there isn't anything I am missing in some other consumer protection or privacy regulation or industry practice that I am not thinking about right now like the issues involved that prevent a lender from providing a copy of a credit report to customers. There absolutely may not be anything, but I figured it if was an issue, someone here might have run into it. Thanks again!

Written permission from the customer as to what they are requesting you to forward should be sufficient. The question is - would another lender accept it? Would you accept a tax transcript given to you through some third party and not directly from the IRS??

You are right that I wouldn't accept it, but I am a full-on skeptic down to the DNA level. Apparently this mortgage broker has no such qualms. Thanks!