Thursday, February 18, 2010

IRS confusion over whether or not a HUD-1 must be signed

I am getting numerous queries concerning the availability of a SIGNED HUD-1 because folks are trying to comply with IRS instructions related to the tax credit program.

The HUD-1 form is part of RESPA.  This link will take you to the pages in RESPA concerning the HUD-1.

Many of you are telling me that the IRS is asking you to provide evidence that individual states do not require signatures on the HUD-1.  Well, my response is that it is a FEDERAL rule, not a state rule.

RESPA clearly says that Signature lines may be added.  That tells me that HUD did not design the form with signature lines, meaning signatures are not required by HUD.

Further, the HUD-1 form is only required when the underlying transaction is a federally related mortgage transaction.  That means that cash purchase transactions may NOT have a HUD-1 form.

I offer the above linked pages to those of you who are having this difficulty meeting IRS rules as evidence perhaps that they might consider changing their documentation requirements as so many of you are in positions in which you have purchased property but because no one knew ahead of time that the IRS documentation rules would be more strict than those of the Dept. of Housing and Urban Development many people may not receive their hoped  for tax credit.

I am certain this was an unintended snafu and would think the IRS would make adjustments to assist taxpayers.  Hope this helps.  ;)

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