Updated over 15 years ago on . Most recent reply
Buyer Beware
I wanted to share a quick story that might help someone else.
Last March, we bought an investment property SFH here in Ft Wayne from an owner that was an Australian citizen.
About 2 months after our purchase, we received a letter from the IRS requesting our Form 8288 and appropriate funds. I assumed that this dealt with our 08 taxes and turned it over to our CPA.
He attempted to contact the IRS and they never responded.
I assumed that this was all handled until we received a letter stating that we still owed the money plus 10% interest and penalties. My wife contacted the IRS while I was out of state and determined that this is a requirement when you buy a house from a foreign owner. We checked our HUD statement and the title company had indeed withheld the funds at the closing. We contacted the title company and they assured us that they had paid the money and filed the 8288. They were going to contact the IRS and send them the canceled check and appropriate paperwork to clear this up. I once again believed that this was a closed issue.
Until, today, when I received a notice that we were about to go into collections with a now 20% fine. I called the IRS and received detailed instructions about how to clear this up. I now have a copy of the canceled check to the IRS from the title company. (Of course through all of this, the IRS employees have had the belief that they could not have received this check. Just not possible.)
Tomorrow, I will make copies, draft a letter, and send to them along with hair and tissue samples and the title to my first born son to attempt to clear this matter up once and for all. (some of that is humor)
Lessons Learned:
1. Think twice about buying from an out of country owner.
2. If you do, YOU file the 8288 and send the check. Do not allow the title company to send the check.
3. Never assume that someone else without a vested interest has done what they said they would do.
Hopefully I will have this resolved soon. If not, I may soon be typing from my new home in Leavenworth Kansas.
Hope this helps someone else.
Chris