How do lenders know if your tax returns are legit?

[spooby72]

If a lender asks for two years on tax returns to prove income, how do they know if the buyer didn't just falsify them at home to allow him to qualify?

 

I know mortgage lenders have buyers sign i.r.s 4506...is there anyway for an auto lender to get tax info from irs without buyers approval? Do auto lenders who are using tax returns to verify income ask the potential buyer to sign a preauthorization to obtain irs copies?

[MarvBear]

If requested by the approving lender then the consumer must sign the document similar to a real estate transaction.

 

I've personally never known them excersize this though.

 

It's pretty easy to spot a fake return anyways.

[spooby72]

Bump

 

What makes a tax return appear fake? Many people do their own taxes using tax software. How do lenders know numbers aren't being manipulated?

[MarvBear]

If someone files a tax return on their own, there should obviously be supporting documents that necessarily accompany the return.

 

We would look at the entire package, most of the information is easy to verify.