Is this weird ?

[jennaxx]

We have no taxes for the 2 years prior to the 2011 and 2012. At that time our business was merely a hobby that was not really profitable at the time. Our other income from those two years was nontaxable.

[Mike_B03]

I thought you're still supposed to file taxes even if the business is at a loss or if the income is non-taxablee?

[Anonymous]

That might be why they are asking.  My understanding is technically you only need 2 years worth of tax returns showing self employment income, but their overlays may be such that they wanted to dig deeper.  When I was going through this process, I had to provide 2011 and 2010 because they wouldn't accept 2012 yet. 

Long story short, I had to go back and amend a 2010 return because I had totally botched everything.  Amending this return triggered them to dig deeper.  In the end I showed them returns from 2005 going forward which finally satisfied them.  At one point they asked me to get a letter from the IRS indicating I didn't owe any taxes.  Such a letter really doesn't exist.  I ended up getting account transcripts from our local IRS office and writing a letter explaining things which satisfied them.

It really doesn't hurt to shop around a bit anyway.  I don't think you would get this request from many other lenders although they might ask for different things.  I'm sure you can satisfy what they're asking for without getting a client to write you a letter though.

[jennaxx]

The LO is not even aware that we do not have anything prior to 2011 and 2012 so I don't think that is why they are asking.

[Anonymous]

That's pretty strange.  I assume you already filed your 2012 return then?  Do you know if it's reflected in your transcripts or if the lender has pulled them yet?

[jennaxx]

Yes, we got on our 2012 right away so we could look into getting a loan. The lender has not pulled anything. This was just based on conversations we had.