Citi Request for IRS Form 4506-T: Advice Sought

Discussion in 'Other Credit Card Programs' started by Explore, Nov 23, 2012.  |  Print Topic

  1. Explore
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    Explore Silver Member

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    In my recent App-o-rama I applied for 8 credit cards and received 7 right away, including the Citi Aadvantage Visa. The exception was the Citi Aadvantage Amex, where Citi wants me to send them an IRS Form 4506-T, Request for Transcript of Tax Form.

    This seems very intrusive, and I'm not inclined to send them the completed form if there's a chance I could get the card without it in my next App-o-rama.

    Any thoughts? Did I wait too long between same-day Citi card applications? Is it worth sending the form, especially if the tax return shows income somewhat below the level originally stated? Or is it better just to wait until the next application opportunity?

    Thanks.....
     
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  2. Wandering Aramean
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    Wandering Aramean Gold Member

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    Welcome to the glory of the Financial Review. Happens reasonably often with AmEx products, especially when you do things like apply for 8 cards at a time. Share the info or don't get the card. And just sharing the info doesn't mean you will get it.

    Finally, to be quite blunt, applying for cards and not providing an accurate number for the income is pretty :rolleyes:.
     
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  3. LETTERBOY
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    LETTERBOY Gold Member

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    If you don't send them the information, you won't get the card. And if you do send the information and it shows a discrepancy between your stated income and the info on your tax return, you still won't get the card. And don't take this the wrong way, but putting down false information regarding your income is mind-bogglingly stupid. :confused:
     
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  4. jbcarioca
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    jbcarioca Gold Member

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    To be blunt: Misstating income, or any otehr factors on a credit application is fraud and can be pursued either criminally or civilly or both. To be practical: that very, very rarely happens and would require something quite dramatic if it were to do so. However, if such a thing were to be a reason for decline by American Express, say, the record will remain for life with them. If a misstatement was made and if delinquency or loss follows there is much more probability of severe negative consequences.

    Wandering Aramean and LETTERBOY have made it very clear how stupid it is to do lie on an application. Keep in mind the consequences can be worse than just not having an approval.
     
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  5. BuckleandBoots

    BuckleandBoots Silver Member

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    I'm going to ignore the whole idea of misstating income for a second (because doing it is stupid), and look at the bigger picture.

    Regardless of the sign-up benefits, a credit card is still a financial instrument. As a result it makes sense and really is fair game for the issuing company to inquire whatever "private" information regarding your financial security they want. If they asked you about your ethnicity, sexual orientation, or favorite flavor of jelly, then I would probably agree that they were collecting irrelevant data, but they are looking for financial records that indicate your financial strength (or weakness). Albeit seemingly invasive, this really is no different than doing a background check on an employee/tenant.
     
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  6. LETTERBOY
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    LETTERBOY Gold Member

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    I am amazed that more people don't understand this. Credit card companies have every right to inquire about whether or not you have the means to pay your bills. When you use a credit card, you're saying to the card issuer, "I'll pay you back at a later date," and they should be able to ensure you're able to do that.
     
  7. jfhscott
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    jfhscott Silver Member

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    I'm basically with the other responses here to the extent that a credit card issuer may seek assurances of ability to pay.

    I am, however, a bit surprised that they need tax returns, and that an ordinary credit pull does not suffice. And I can imagine that some people will have information on tax returns (beyond mere amounts of income) that they do not particularly want to share with the world.

    OP's gonna have choose whether to tolerate the intrusion.
     
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  8. marcwint55

    marcwint55 Gold Member

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    If there is a discrepancy in your stated income versus your tax returns, I would drop the application and not make that mistake again in the future.

    There is no difference in fraudulently obtaining a home loan or a credit card, they are both illegal and the consequences can be severe.

    No amount of miles or other benefits is worth the risk of a criminal prosecution. It does not matter if you intend to defraud the lender or not, you are committing a crime if you lie on an application.
     
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  9. Wandering Aramean
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    Wandering Aramean Gold Member

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    Why? An ordinary credit pull has surprisingly little data in it regrading the income side of the equation; basically nothing. If there is any question as to whether the applicant can cover their spending then the best way to validate that would be to verify the income. And a tax return does that very, very well.

    The fact that the OP arguably has something to hide makes it even less surprising.
     
  10. horseguy

    horseguy Gold Member

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    That is precisely why I actually look it up from my previous year's tax return. I've had AMEX do the tax return thing a couple of times. Both times, my income agreed to the dollar. Everyone was happy.
     
  11. Explore
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    Explore Silver Member

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    I'm talking about a rounding of income, not a massive discrepancy. And likely I would be granted cards at the same rate if I stated the exact income, given my 20-year history of paying off cards promptly with no delinquencies or bankruptcies. That may also explain why I've never experienced a financial review.

    I'm new to the "App-o-Rama" concept, so perhaps I should be a bit more careful when stating income. I'm not going to bother following up with Citi on the missing card; after all, 7 out of 8 isn't bad at all.

    I disagree that gross income should be the main indicator of credit-worthiness. Some of us spend responsibly, have stable jobs, have paid off our mortgage and don't own personal autos, so we can handle plenty of credit cards. Of course, we never get close to credit limits. But banks don't have a handle on our discretionary income or morals, so I think I've been advised to be very careful.
     
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  12. LETTERBOY
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    LETTERBOY Gold Member

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    Considering how many cards you're applying for, I think any discrepancy will raise eyebrows with a card issuer.
     
  13. jfhscott
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    If I am correct, a credit pull will include data relating to income an applicant has identified in previous applications for credit. Of course, that amount might have been fudged in the past. And, yes, a previous tax return is more reliable, but the only time I have ever been asked for one relating to an application for credit was for a mortgage.

    My returns are pretty straightforward and do not disclose anything out of the ordinary, but I can see some people having more substantial privacy concerns. This is not to say, of course, that a financial institution should not be permitted to require such a disclosure.
     
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  14. jbcarioca
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    Yes, good sense. I have done that also, and never had a problem. I have had only one credit review that required the backup. The reviews are growing more common as capital requirements and impairment charges rise. Churning has always been a high risk tactic anyway, but now it is becoming more so, especially for the issuers with high quality risk management.
     
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  15. Wandering Aramean
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    Wandering Aramean Gold Member

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    That is possible but I haven't seen it on the versions I get for prospective residents in my building when we run a check on them.
    :confused:

    Based on the scenario you've described - no other debt, etc. - how else would a bank decide how much credit to extend you? That you've always paid them off on time is great. But you only make $XX/year so it might make sense to the banks to not extend you that much credit beyond what your other credit is. If all the banks give you a $5K limit that's very different than a $25K limit and part of how they decide which is the correct number is based on what your income is.

    It might not be how they decide if you should be approved but it could play in to how they decide what limit they put on the card.
     
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  16. jbcarioca
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    jbcarioca Gold Member

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    Credit bureau reports do not include income data in the United States. Some 'imputed income' attributes can be purchased or calculated but those are are highly inaccurate. As a result many creditors request supporting eta. these days nearly all mortgage applications require supporting documentation and more credit card issuers are asking for that, especially for larger limits.
     
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  17. jfhscott
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    Then I am corrected.

    But given how many times I have reported income (as identified - honestly - by me, I am truly surprised that such data does not get captured by credit bureaus. It would seem pretty easy.
     
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  18. jbcarioca
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    jbcarioca Gold Member

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    The sources they use are public records and lender reports, mostly. Self reported data is not included except as a customer dispute or explanation and then it is very abridged and usually ignored.
     
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  19. Mountain Trader
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    Mountain Trader Silver Member

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    Income properly reported on a tax return may be much different that income properly listed on a credit app. Here's just one example: Large IRA with significant income. That's the IRA owner's income in my mind but it doesn't show up on his/her tax return until it is withdrawn from the IRA, which is often years later (and could be never, at least by the original owner).

    A card company getting tax info is likely good practice if they suspect something is askew, but in some cases, much more work is required.
     
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  20. Wandering Aramean
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    Wandering Aramean Gold Member

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    But not income which can be used as part of a CC application.
     
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  21. jbcarioca
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    jbcarioca Gold Member

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    IRA and other wealth that is unrealized is normally not counted, and is usually not important anyway from a CC point of view. For some card, multi-currecy and other exotic "high roller" cards, wealth data is sometimes used. Even there the existence of, say, a reported private banking relationship, a huge mortgage or other such data, often not sourced from consumer credit reports, is more important.
     
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  22. Mountain Trader
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    Credit apps I have seen do not usually define income. The only added language I recall is the occasional "Total Household Income".

    So on what basis does one conclude that income in an IRA, or for that matter increase in price of an unsold liquid stock, should not be included? I don't mean in a generic sense but what specific rule(s) prohibits this?
     
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  23. jbcarioca
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    No rule prohibits inclusion of any tax-deferred income nor any other category of income, including even gifts. In applications there are often categories for alimony, child support, dividend and interest income, etc. Those rarely, if ever, appear in a credit card application. However, when a lender asks for a Federal tax return they obviously can ask for all schedules, even though they very rarely do that. The question often is if a borrower wants to disclose all of that just to have a credit card. Many of us will not do that, thus quite a few people will close an account rather than go through a full-fledged credit review.
     
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  24. Mountain Trader
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    I agree, and faced with a demand to release tax info, I might well just decline.

    But the issue I raised is another matter. namely what qualifies to be included in answer to "Income" on a credit app, and what actual rules guide that answer,
     
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  25. jbcarioca
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    Right, and there are no specific regulations nor rules, other than those specified in the application itself. Despite that, false answers are bad to do, as we've all agreed. Generally there will be mouse type that says you can include alimony, child support or otehr sources, but you may be asked to prove income. The mouse type varies quite a bit. Sorry, i thought I was answering the question you posed.
     
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