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ModernTax offers a digital platform for rapid IRS tax transcript and employment income verification. It provides IRS 8821-based transcript pulls for loan underwriting and an API-first solution for W-2 and 1099 income verification from IRS records. This SOC 2 certified, IRS authorized technology delivers secure, accurate, and expedited data for financial due diligence.
Matthew Parker founded ModernTax in 2021, addressing inefficiencies in traditional tax and income verification. His insight was to build a streamlined, secure system leveraging direct IRS data. This empowers lenders and HR professionals to quickly complete critical verifications, overcoming conventional delays.
ModernTax primarily serves SBA lenders, commercial banks, and human resources platforms. The company modernizes tax-related due diligence, offering a dependable, secure, and efficient alternative. Its vision is to establish a digital standard for verifying financial and employment information, improving speed and accuracy across industries.
ModernTax has raised $700K across 2 funding rounds.
ModernTax has raised $700K in total across 2 funding rounds.
ModernTax has raised $700K across 2 funding rounds. Most recently, it raised $100K Seed in October 2023.
| Date | Round | Lead Investors | Other Investors | Status |
|---|---|---|---|---|
| Oct 1, 2023 | $100K Seed | — | Cream City Venture Capital, FINTOP Capital, Startup Mavericks, The Artemis Fund, Baron Davis | Announced |
| Jun 1, 2021 | $600K Seed | — | Broadway Angels, Merline Saintil, Operator Collective, The General Partnership, Aston Motes, JOE Greenstein, Nick Caldwell | Announced |
ModernTax has raised $700K in total across 2 funding rounds.
ModernTax's investors include Cream City Venture Capital, FINTOP Capital, Startup Mavericks, The Artemis Fund, Baron Davis, Broadway Angels, Merline Saintil, Operator Collective, The General Partnership, Aston Motes, Joe Greenstein, Nick Caldwell.
ModernTax is a San Francisco-based fintech company founded in 2021 that provides an AI-powered platform for real-time tax data verification and extraction, primarily serving financial institutions (FIs), insurance companies, lenders, banks, and fintechs.[1][2][3][6] Its core product is a developer-friendly API and SDKs that automate access to tax records, transcripts, refunds, and balance monitoring via intelligent document processing, machine learning, natural language processing, and voice AI agents for IRS interactions, solving manual data entry bottlenecks that cause delays, errors, and high costs in underwriting, fraud prevention, and compliance.[1][2][3][4] The platform improves data accuracy by over 90%, cuts processing times by 75%, and enables seamless integrations, with features like 30-minute turnarounds, webhook notifications, and white-label options offering partners 25% revenue share after 2-week integrations; it targets sectors like lending, insurance, mortgages, and small business services amid growing demand for transparent financial data.[1][2][3][5]
ModernTax, formerly RefundNote, has shown growth momentum through partnerships with data providers like D&B, Experian, TransUnion, and Enigma Technologies, plus adoption by over 110 lenders; it raised $100K in its latest round in October 2023 and continues expanding with new features and customers.[2][4][7]
ModernTax emerged during the 2020 pandemic from founders' hands-on experience in tax preparation and financial services, spotting inefficiencies in data flows for government aid like PPP, EIDL loans, and economic impact payments, where 95% of their prior business shifted to eligibility checks.[2] CEO Matthew Parker, with six years in the space, pivoted from face-to-face tax operations to build a platform leveraging the vast U.S. tax records filed annually by 15 million businesses and 160 million individuals, aiming to streamline document collection that plagues FIs and insurers.[2][4] Originally RefundNote, it rebranded to ModernTax in 2021, basing in San Francisco, and gained early traction by replacing manual agent processes with API-driven access, securing initial paying partners like Enigma and positive feedback from major data firms.[2][4][6]
Pivotal moments include launching a Live Contributory Network for on-demand verification via licensed tax pros, a Business Verification Platform, and Verifier API for KYC and tax checks, plus voice AI for IRS calls to eliminate human bottlenecks.[3][4]
ModernTax rides the fintech wave of real-time financial data democratization, akin to Stripe's payments revolution, by unlocking $3T in annual tax data for instant underwriting amid rising small business lending, insurance digitization, and KYC mandates post-pandemic.[2][3][8] Timing aligns with IRS modernization, AI adoption in legacy bureaucracy, and regulatory pushes for transparency, favoring platforms that bypass "fat finger" errors and form-filling friction for 15M U.S. entities.[3][4] Market forces like online lending growth (e.g., LOS platforms) and insurer needs for income verification amplify its edge over manual providers, influencing the ecosystem by enabling faster loan closings, lower risk, and consumer-friendly transparency via APIs that fintechs embed.[2][3][6]
ModernTax is poised to scale as AI tax infrastructure becomes table stakes for lenders and FIs, with plans for eight new customers, contributor portal enhancements, and business features driving 2024+ growth beyond its $100K funding.[4][7] Trends like embedded finance, voice AI ubiquity, and IRS API expansions will accelerate adoption, potentially evolving it into a full-spectrum financial data hub. Watch for deeper insurance and real-estate integrations, cementing its role in a more transparent $3T ecosystem—transforming tax hurdles into competitive velocity, much like its pandemic-born insight unlocked for early users.[2][3][8]
