topic Re: IRS 4506-C in Credit Card Applications

IRS 4506-C

frogsage — Thu, 12 Sep 2024 11:27:26 GMT

BLUF: I just turned 20. I’ve been inflating my income from 13K to 80K. I have multiple cards from AMEX. AMEX is requesting an income check before I go through with the AMEX Gold. Would it be fine to submit a 13K W-2? Do I wait until I’m 21 so I can add my parent’s income or would my account already be closed by then for not responding to AMEX’s request?

Re: IRS 4506-C

JoeRockhead — Thu, 12 Sep 2024 11:55:00 GMT

Yes, you would likely face account closures for failing to adequately respond to a 4506 request, submitting a W-2 doesn't qualify as they want to look at your tax returns at this point. It's also fraud, against federal law to lie on a credit application which can come with serious consequences such as substantial fines, Up to 1 million dollars, and/or prison time of up to 30 years.

In one example, a NY man was convicted of lying (about his income) on a bank loan application and received time served + 5 years probation and a $50k fine

Re: IRS 4506-C

coldfusion — Thu, 12 Sep 2024 12:47:43 GMT

@JoeRockhead wrote:
Yes, you would likely face account closures for failing to adequately respond to a 4506 request, submitting a W-2 doesn't qualify as they want to look at your tax returns at this point. It's also fraud, against federal law to lie on a credit application which can come with serious consequences such as substantial fines, Up to 1 million dollars, and/or prison time of up to 30 years.

In one example, a NY man was convicted of lying (about his income) on a bank loan application and received time served + 5 years probation and a $50k fine

^^^ this

You can always call AMEX and try to negotiate providing alternate documentation for proof of income but I'd suggest you keep your expectations tempered. Insofar as being able to claim your parents income as household income, that comes with the standard of having reasonable access to that income. Being named on a joint checking account or as an authorized user on a parent's checking account arguably meets that standard, but if you're planning on a "I can ask them for money when I need it and probably get it" spiel that type of response likely won't.

I don't think I'd worry about legal ramifications but I do suspect you've lined yourself up to have a FAFO moment. Getting caught making egregious falsehoods on credit applications doesn't lead to good outcomes.

Re: IRS 4506-C

pizzadude — Thu, 12 Sep 2024 12:53:58 GMT

What does turning 21 have to do with "adding my parents income" ?

Re: IRS 4506-C

coldfusion — Thu, 12 Sep 2024 14:02:18 GMT

@pizzadude wrote:
What does turning 21 have to do with "adding my parents income" ?

CARD Act does outline that if you're under 21 you either need independent income or a cosigner to legally apply for an unsecured credit card, but I don't know how that is interpreted if looking to claim household income in addition to valid independent income.

Re: IRS 4506-C

tbgothard — Thu, 12 Sep 2024 15:31:04 GMT

@cpizzo , if over 21, most issuers now follow current guidelines that say you may include other household income as long as you have reasonable access to that income. Typically, it is meant to mean spousal or domestic partner income. Another poster mentioned that a lender probably wouldn't consider parent income as acceptable unless the child in the household was on a joint bank account or had some other way to access the parent income. For the CU I was a loan officer at, our lending guidelines would not allow children to inlcude parent or spousal income. It was always individual income unless it was a joint applicaiton for credit.

Re: IRS 4506-C

CreditPoor — Thu, 12 Sep 2024 15:35:40 GMT

Openly admitting to credit card fraud on a public forum probably isn't the greatest idea to begin with.

I would simply close those account's before the issuer does and take todays lesson to heart. Unless your parents are depositing their funds in your bank and you have access to those funds, I wouldn't be trying to claim your parents income either.

Re: IRS 4506-C

Anonymous — Thu, 12 Sep 2024 16:12:39 GMT

Just close the accounts, yourself. So it shows closed by consumer, maybe in the future you wont be blacklisted but they MIGHT ask for the forms to approve you again. If you go through with it and they find out the truth, you might actually be demarketed or blacklisted from the bank forever because of the 'fraud'. banks hate lying or fraudulent information. id close and move on. come back to amex in the future with your REAL income. theyll approve you, this way in the future u can submit the forms truthfully without risk of demarket.

Re: IRS 4506-C

northway — Fri, 13 Sep 2024 22:34:37 GMT

So there are two things that could be going on.

If it's a Financial Review, you must provide the 4506-C or you'll face account closure across all your cards with AmEx.

If it's just a request with a credit card application, you can safely ignore it and it will just drop if you don't respond.

As far as AmEx is concerned, they want to know YOUR income. Anything that doesn't match your tax transcripts will lead to account closure if it's a Financial Review.

Re: IRS 4506-C

Anonymous — Fri, 13 Sep 2024 22:43:39 GMT

@frogsage wrote:
I’ve been inflating my income from 13K to 80K. I have multiple cards from AMEX. AMEX is requesting an income check before I go through with the AMEX Gold.

Just curious with 13k (real number) gross income what would you use an Amex Gold $325 AF and a $6000 spend SUB for?

Re: IRS 4506-C

Tiggr — Sun, 15 Sep 2024 21:50:15 GMT

This thread reminds me of a question I've been meaning to ask. AFAIK when they ask for annual income, you're putting a number that you can expect to achieve by the end of the year. Would it be out-of-bounds to take your best month and multiply it by 12? Or what If you're a student who receives student aid or even loan disbursements 2-3 times a year, would you not include that as the amount of income for that year, not like it would show up on taxes.

Re: IRS 4506-C

Zeiram — Mon, 16 Sep 2024 02:44:35 GMT

@JoeRockhead wrote:
Yes, you would likely face account closures for failing to adequately respond to a 4506 request, submitting a W-2 doesn't qualify as they want to look at your tax returns at this point. It's also fraud, against federal law to lie on a credit application which can come with serious consequences such as substantial fines, Up to 1 million dollars, and/or prison time of up to 30 years.

In one example, a NY man was convicted of lying (about his income) on a bank loan application and received time served + 5 years probation and a $50k fine

That was a very odd case because he submitted applications to several banks stating figures from like $50,000 to $250,000 or something, on different applications, got a bunch of loans he couldn't pay back, and took them to bankruptcy court and admitted to the court his only income was a Social Security check. So they decided to make an example out of him. Banks get copies of bankruptcy schedules when you're in there telling a court you can't pay your bills. Filing bankruptcy after pulling something like this was basically turning himself in.

It's in the realm of possibility but they usually don't go after people unless they're out there committing major fraud and costing the banks money. If they went after everyone who ever guessed wrong on a credit card application by a few thousand dollars, then half the country would be in prison, so it's one of those things where it depends on how bad your behavior was.

OP should just not reply to the 4506-C. If they close the other accounts, they close them, but handing them proof that you've been lying would be the worst thing you could possibly do, aside from lying to them to begin with.

Re: IRS 4506-C

Zeiram — Mon, 16 Sep 2024 02:39:53 GMT

@coldfusion wrote:
@JoeRockhead wrote:
Yes, you would likely face account closures for failing to adequately respond to a 4506 request, submitting a W-2 doesn't qualify as they want to look at your tax returns at this point. It's also fraud, against federal law to lie on a credit application which can come with serious consequences such as substantial fines, Up to 1 million dollars, and/or prison time of up to 30 years.

In one example, a NY man was convicted of lying (about his income) on a bank loan application and received time served + 5 years probation and a $50k fine
^^^ this

You can always call AMEX and try to negotiate providing alternate documentation for proof of income but I'd suggest you keep your expectations tempered. Insofar as being able to claim your parents income as household income, that comes with the standard of having reasonable access to that income. Being named on a joint checking account or as an authorized user on a parent's checking account arguably meets that standard, but if you're planning on a "I can ask them for money when I need it and probably get it" spiel that type of response likely won't.

I don't think I'd worry about legal ramifications but I do suspect you've lined yourself up to have a FAFO moment. Getting caught making egregious falsehoods on credit applications doesn't lead to good outcomes.

You have to do whatever the credit card application says is allowed, and I don't believe any of them allow you to claim someone else's income, even if you have access to it, unless you're over 21.

Re: IRS 4506-C

coldfusion — Mon, 16 Sep 2024 10:52:52 GMT

@Zeiram wrote:
@coldfusion wrote:
@JoeRockhead wrote:
Yes, you would likely face account closures for failing to adequately respond to a 4506 request, submitting a W-2 doesn't qualify as they want to look at your tax returns at this point. It's also fraud, against federal law to lie on a credit application which can come with serious consequences such as substantial fines, Up to 1 million dollars, and/or prison time of up to 30 years.

In one example, a NY man was convicted of lying (about his income) on a bank loan application and received time served + 5 years probation and a $50k fine
^^^ this

You can always call AMEX and try to negotiate providing alternate documentation for proof of income but I'd suggest you keep your expectations tempered. Insofar as being able to claim your parents income as household income, that comes with the standard of having reasonable access to that income. Being named on a joint checking account or as an authorized user on a parent's checking account arguably meets that standard, but if you're planning on a "I can ask them for money when I need it and probably get it" spiel that type of response likely won't.

I don't think I'd worry about legal ramifications but I do suspect you've lined yourself up to have a FAFO moment. Getting caught making egregious falsehoods on credit applications doesn't lead to good outcomes.

You have to do whatever the credit card application says is allowed, and I don't believe any of them allow you to claim someone else's income, even if you have access to it, unless you're over 21.

The requirements are dictated by what federal regulations say is allowed, the issuers are merely complying with them.

The CFPB holds that as the Truth in Lending Act and as amended by the Card Act of 2009 stipulates that when an applicant is under 21 an issuer is legally required to only consider the applicant's independent ability to pay unless they have a cosigner, but when 21+ the standard shifts to including ability to also consider income or assets that have a 'reasonable expectation of access'. OP's comment about waiting until they were 21 to try to claim their parents income as household income showed that they already knew and understood this when they started the thread.

Re: IRS 4506-C

Zeiram — Mon, 16 Sep 2024 19:50:13 GMT

That was sort of my point. OP decided to knowingly ignore that provision when he filled out the credit card application.

When you file a credit application, banks hang onto that. They can use it against you if you ever owe them money and can't pay them back.

They usually don't investigate simply because if it sounds reasonable it probably is, and people putting down wage earner incomes won't be worth all the detective work involved in proving that's what happened relative to what it cost the bank, but if you put down that you had a lot of money and then rack up a ton of debt, like that guy in New York did, you can get in some serious trouble.

But is it even worth the possibility of a criminal record? No it is not. Even if the court decides to be lenient, criminal records are public records, so I never recommend breaking the law.

And it is especially bad when they can show you knew it and you did it anyway, which is not always required, but makes it so much worse regardless. It's at least a victory lap for the prosecutor and those are never good.

Re: IRS 4506-C

Lyle5653 — Mon, 30 Sep 2024 02:49:01 GMT

When I do credit card application I put down my ballpark estimate of what my yearly wages are. I then add what I realisticly could make working my off time whether it be extra shifts at work, or driving ride shares.

The problem with OP is that he thinks the banks are stupid, and that is a dangerous game to play. The banks know what the average income is for his age in the location he lives for the job he works. They know he committed fraud, and are waiting for him to hang himself.

When it comes to adding household income. Unless roommates/family are using your cards to pay the bills/trips, and paying you back. I would not do it. Just my opinion

Re: IRS 4506-C

ElvisCaprice — Mon, 30 Sep 2024 05:50:31 GMT

@Anonymous wrote:
@frogsage wrote:
I’ve been inflating my income from 13K to 80K. I have multiple cards from AMEX. AMEX is requesting an income check before I go through with the AMEX Gold.
Just curious with 13k (real number) gross income what would you use an Amex Gold $325 AF and a $6000 spend SUB for?

This ^^^^, I think we are being played with this thread.

Re: IRS 4506-C

frogsage — Fri, 08 Nov 2024 03:53:48 GMT

It turns out it was just a request with a credit card application, like you said, not a Financial Review. Thank you for bringing me peace of mind. I'll be more careful from here on out. I waited until it dropped and ended up getting the Gold card.