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SCOTTSDALE, AZ / ACCESSWIRE / February 24, 2023 / The current recession could be shortened if people previously shut out of the housing market had an alternative means to demonstrate their creditworthiness. An innovative tax scoring system, Tax Return Credit Score (TRCS), could help an estimated 54 million Americans who are “non-scorable” under traditional credit scoring methods. TRCS is the brainchild of the EZ DOC Corporation. Randall Sorensen, CEO, launched the software with the help from a transdisciplinary program at the Arizona State University Sandra Day O’Connor College of Law.
What is the difference between TRCS and a credit score? A federal tax return is used to create a tax return credit score. Consumer tendencies in your traditional consumer score are reflected in a federal tax return. A tax credit score calculates monthly cash flow from taxable and non-taxable sources. Lenders refer to this as “ability to pay”. By utilizing a series of mathematical algorithms, tax variations are measured from the averages of 150 million taxpayers, resulting in subtracted points to arrive at a tax return credit score and a tax letter grade. Everyone starts with a perfect score of 850 and a letter grade of A+. Factors that impact the score include problematic mortgages, expensive autos, abusive deductions, gambling issues, a prolonged absence from the workforce, and if the taxpayer is delinquent on their taxes.
Flagging tax debts is a huge advantage TRCS has over traditional credit scores. Credit bureaus no longer even report tax liens. If consumers are docked 100 points for having a 30 day payment delinquency then why is a 3 year old tax debt ignored?
According to tax statistics published on the IRS.gov website, over 30 million taxpayers owe an average balance of $2,500 at the tax deadline. We all know of a friend that has had the IRS clean out their bank balance. This would make it difficult to make the mortgage payment and put the loan at risk.
The proof is in the test results. Statistics compiled by EZ DOC Corporation show that Tax Return Credit Scores (TRCS) are generally within 3-5% of credit scores. A TRCS can help identify errors in your credit score. For example, one client received a TRCS of 803 compared to a credit bureau score of 720. The taxpayer had failed to notice that the credit bureau mistakenly listed a prior car loan of $34,000 that had been paid-in-full. They were also “sharing” a credit card with their daughter which had exceeded its limit of $8,000 and stood at $8,800, unbeknownst to the client. Contacting the credit bureau to remove the car loan along with the daughter paying down the credit card, resulted in a credit score increase of 84 points, to 804, nearly matching her TRCS.
Sorensen stated, “The best feature of the Tax Return Credit Score is the ability to identify identity theft and abuse of your social security number. These events can be traumatic life experiences. If lenders were to accept Tax Return Credit Scores, it would open a pathway to millions that have been left out of the home ownership market.”
Randall Sorensen, CPA has been practicing accounting for 40 years and has specialized in forensic accounting for over 35 years. Randall Sorensen’s accounting practice is located in Scottsdale, Arizona.
About EZ DOC
EZ DOC helps you select from 545 CPA prepared Request for Production of Documents that are tailored to specific occupations or customize your own from our database of 330 records. In addition we can obtain and summarize IRS tax records. Being able to review tax returns in minutes is a gamechanger in litigation.
Contact Information:
Company: EZ DOC
Name: Randall Sorensen, CPA
Phone: 480-344-2970
Email: [email protected]
Location: Scottsdale, Arizona
https://www.ezdocrequest.com
SOURCE: EZ DOC
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