January 21, 2008

Want to know another reason why the world financial system is now crashing? Because the IRS simply didn't do their job.


When it comes to all the real estate agents, mortgage brokers and appraisers who took kickbacks these past few years and didn't report them as income, all the housing gamblers who flipped homes they didn't live in (and said they did) or who took cash-back under the table, and all the massive mortgage fraud seen all over the land, I have one question:

Where the hell was the IRS?

You'll note for ALL OF 2007 the IRS initiated a whopping 337 investigations. Nice work lazy government. That's only about 999,663 too few. And don't get me wrong - I hate the IRS and want a complete overhaul of how taxes are paid (consumption vs. income). But we do need the one agency in charge of investigating tax fraud to, well, investigate tax fraud.

The United States is no longer a nation of laws HP'ers. We're a nation of illegal behavior run amok, where crime pays, honesty and integrity are penalized, and our government continues to fail us at an alarming rate. And now the world pays the price.

Part of any "housing crash stimulus" bill should be a few billion for the IRS to hire thousands of investigators whose purpose it should be to investigate all of the housing transactions of the past few years for fraud. All of them. Start with the stated income loans - just compare the number the IRS had with the number on the loan document, and you'll have hundreds of thousands of cases of fraud right there.

From the IRS website. Too bad they didn't do what they said they do. My guess is they've got two people in the basement looking at mortgage fraud.

Special agents with IRS Criminal Investigation are uniquely equipped to investigate these types of mortgage fraud and illegal real estate crimes because they are skilled financial investigators whose mission is to 'follow the money.'


Some of the common real estate fraud schemes include:

*Property Flipping — A buyer pays a low price for property, and then resells it quickly for a much higher price. While this may be legal, when it involves false statements to the lender, it is not.

*Two Sets of Settlement Statements — One settlement statement is prepared and provided to the seller accurately reflecting the true selling price of the property. A second fraudulent statement is given to the lender showing a highly inflated purported selling price. The lender provides a loan in excess of the property value, and after the loans are settled, the proceeds are divided among the conspirators.

*Fraudulent Qualifications — Real estate agents assist buyers who would not otherwise qualify by fabricating their employment history or credit record.

18 comments:

Anonymous said...

Don't poke that sleeping rattlesnake with a stick. I might have to start paying taxes again.

Afterthought said...

Inflation is the flattest tax.

Libertarianism will be swept away as people realize that the New Deal was much much better for the middle class and clamor for a New New Deal.

What undid the New Deal if it was so good? Racism. When the Left tried to expand the New Deal to include blacks and others, the Slave States abandoned them for the Right. The southern middle class that was created by the New Deal hated blacks more than they loved themselves, apparently.

Another thing that hurt America was equating socialism with communism; they aren't the same. But those with deep pockets began to fund "think tanks" to convince the people that socialism was bad even though we've had "theft" and redistribution by government since the founding of America (recall slavery, indentured servitude, stealing the land of the natives and giving it away to white settlers). Under socialism, the economy still grew, we were still able to fight and win wars, and the middle class was stronger than ever.

Remember Reagan and "welfare-queens"? If you ever bought into that you are a rube. The Republicans have been gutting the Treasury and moving their assets to slave nations (China, Mexico, Dubai), and debasing the currency ever since Nixon!

The bubble actually started in 1973 with the end of the gold standard, and when Carter tried to get Americans to live in a sustainable Biblical way, he was booted out in favor of the Bohemian Grove Reagan and the Astrologer wife Nancy.

The truth hurts; but it is a good hurt. I will quote from Acts 4:

32 And the multitude of them that believed were of one heart and of one soul: neither said any of them that ought of the things which he possessed was his own; but they had all things common.

33 And with great power gave the apostles witness of the resurrection of the Lord Jesus: and great grace was upon them all.

34 Neither was there any among them that lacked: for as many as were possessors of lands or houses sold them, and brought the prices of the things that were sold,

35 And laid them down at the apostles' feet: and distribution was made unto every man according as he had need.

Marky Mark said...

But - you are sure to get audited if you claim the home office deduction...

Marky Mark

Anonymous said...

Yeah, This SHOULD have been the very FIRST HP thread!

This is where it all starts people. When it was originally passed in 1997 (it seemed like a good idea?). A decade later I think it's obvious allowing people to walk away with 500K in TAX FREE money every other year... will get you ( homes that "appreciate" 500K every other year!)

By at least 2003 this should have been obvious. I've got to ask, do ANY of you know someone (anyone) that's gotten "busted" for declaring a vacation/2nd home as "primary"? ANYONE?

Thought so. It was like taking candy from a baby! Since nearly everyone was doing it, this was like lighting up a joint at a concert. Safety in numbers and they can't bust us all. Much luck in getting that back into the bag.

DinOR

Anonymous said...

marky mark,

Oh btw, you're absolutely right. Any one of us is infinitely more likely to get "popped" for fudging on the percentage of sq. ft. we claim for home office use than stealing 500K on the cap gains exemption!

(Any wonder everyone was doing it?)

ugh said...

IRS is a joke.
US gubbermint is a joke.

Thousands of FB'ers robbed banks with a pen. Haha.

Congress done yet with the steroid threat to national security?

Bwaaaaaaahahhahhaa!

Natural Eyebrows said...

This should be a job for the FBI, not the IRS. But Bush has the FBI tailing anybody with a Middle Eastern background, so the IRS is getting assigned to these cases.

Anonymous said...

aftethought, you are a moron. are you related to bitter renter?

Malcolm said...

For me, a sign of how bad things had got would be the time that a CA mortgage company was trying to give a $200k no-money-down loan to an employee of mine who was making $26k per year.

Anonymous said...

Poster, Thank you.

"Thousands of FB'ers robbed banks with a pen."

-Poetry, sheer poetry!

Anonymous said...

"Poetry"

Certainly is. My favorite is "Why would a homeowner risk robbing a bank when he can just walk through the front door of the bank during business hours and rob his OWN HOUSE!"

I agree the FBI should have been more involved but through CPA channels (and annual conventions etc.) they could have gotten the word out that this foolishness was not going to be tolerated!

Really at NO COST! "Bummer dude, I just talked to my tax guy and he said they're coming down on this stuff hard. If you're "straddling" primary residences they WILL eventually catch up w/ you + penalties!"

It doesn't cost anything to circulate a memo.

DinOR

Anonymous said...

.



It's Amazing!

Things can get this Bad

Two years ago the I.R.S. had a re-adjustment on my taxes

$6.75

When I had already sent over $41k
in tax,

The form they sent was Huge and somewhat threatening!

And they wanted it yesterday!



.

Anonymous said...

"$6.75"

I get those heart-stoppers once in a while too. OMG! What now!?

And all the while some rube flipper w/ZERO understanding of the tax code is walking around worry free w/ his FIVE properties ALL of which he plans to sell (tax-free) over the next ten years!

Then again, why SHOULD he worry!? There's zilch enforcement as this entire arrangement has been more-or-less an "honor system anyway!

(Basically... you'd have to TRYING to get "caught"!) Even then you could always explain it away as just a big misunderstanding? I guess as long as there's "some" plausability to your argument you likely won't hear any more about it.

Even though the law didn't take effect until 1997 doesn't mean those w/ cost basis from the 70's (and multiple properties) can't be cashing in on this!

DinOR

Frank@Scottsdale-Sucks.com said...

They're too busy prosecuting Wesley Snipes and trying to put him away for 13 years.

You have to be a celebrity to get prosecuted by the IRS. They don't like going after the little guy, they like making an example of celebrities because that gets them the big promotions and pay raises and opens up public office ... like how Giuliani made a name for himself prosecuting the mob.

From what I know about the laziness and indifference of most realtors and mortgage brokers, I'm guessing a good 50% never paid any taxes on their 1099 income and when the massive revenue shortfall hits, you'll see the IRS hiring agents to go after them.

Though after foreclosure and bankruptcy there won't be anything left for the IRS to seize from them.

Anonymous said...

The pathetic Reaganomics was applied once again by another idiot like Reagan, for the last 8 years, and failed miserably. But you fools want more Reaganomics. No wonder this country is going down.

Anonymous said...

afterthought you sir are a true idiot

that is all

Anonymous said...

Anonymous said...
The pathetic Reaganomics was applied once again by another idiot like Reagan, for the last 8 years, and failed miserably. But you fools want more Reaganomics. No wonder this country is going down.

January 21, 2008 9:35 PM


----
Only people who complain about Reagan are black, lazy, stupid or all of the above.

Anonymous said...

The IRS pays a reward for tips leading to increased revenue.
The bad news is that it's in US $.