Another LTHBC story

[DaveO]

Client owns his home free and clear and sells it and buys another on the same day in private, all cash transactions. Closing is done by an attorney; no HUD-1 is generated. He qualifies for the LTHBC so we attach the closing statement (with signature) and title insurance to the 5405 since that’s all there is.

He gets a letter back from the IRS asking for a HUD-1 or equivalent with signatures. The letter goes on to provide more instruction then states, “The delay from this request for additional information may have been avoided if you had electronically filed your tax return.” Why didn’t I think of that?

[BP.]

Totally nuts! So how will you resolve, since the signed closing statement was included first time? Letter? Phone call?

[taxdude71]

I had this happen also. Clients bought home for cash and I sent a copy of purchase agreement and reciept of the sale. IRS still said it wasn't enough. I ended up writing a letter to the IRS explaing the situation with the name and phone of the person that built the home. Still waiting for a reply from the IRS.

[DaveO]

I'll start with a letter and detail why the Hud-1 wasn't there in the first place. The signed closing statement serves the same purpose. If no response in 30 days I will contact the advocates office.

[ChEAr$]

I'll start with a letter and detail why the Hud-1 wasn't there in the first place. The signed closing statement serves the same purpose. If no response in 30 days I will contact the advocates office.

Considering the backlog IRS has with all these, 30 days may be just a little too short a
time. I'd give them more, say.. 75 days, maybe 90.

[AZ-Tax]

5405 needs to be mailed in, no e-filing, correct?

I mailed in my clients 5405 along with a copy of his HUD so far ok.