Buying Property From A "patriot"
What papers are filed with any government agency at closing. I have a contract to buy a property from a "patriot" (self named - one of those people who hate government and despise taxes). The property is in a common law trust, and he wants to make sure that nobodys SSN or TIN (trust does now have a TIN) shows up on any papers and that nothing is filed with the IRS. He also wants to be paid in $100 dollar bills. How do you manage that?
Brenda
What he is asking you to do is break the law.
Run, don't walk, away from this "deal."
Roger
I agree with Raj .Its not worth the trouble to deal with a guy who refuses to go by the law!
I used to know a guy in his late 70s who despised taxes as much and who thought that he is doing the work and the government is taking away his hard earned money in taxes(Lol,such people exist still!) and he would do all his deals through cash.Actually a very well educated man with degrees in economics to www.boot.lol.He even refused to have a checking account and had all his money converted to silver which he used to store at his home.
He had a bunch of properties and he wanted cash for www.it.I told him I cant do the deal just for the above reasons.
What law is this breaking. I am asking for education.
Is it against the law to
1) have a have a common law trust? .
2) not record any SSN or TIN numbers?
3) not file with the IRS
4) get paid in cash.
He is allowing me to buy the trust (appoint all the positions) and then he will personally hold a note for the full amount.
Obviously I am letting my lawyers review the entire trust documents and I will not do anything illegal. But I want to learn. Not to just be told it is illegal and to run.
Brenda
the are tons and tons ofquestions issues of the legality of "patriots" or soverign soles, or corporation sole, etc.
IRS says they are illgeal tax structures, as the owners are trying to avoid taxs is the simple up shot.
You could go to the closing w/ a big gun, but he prob as more and bigger.
as a sell I did have to sign a form that I was a US citizen or resident alien. Good question as to what actually gets recorded.
I believe the closing agent (title company/attorney) is required to report the gross proceeds on a 1099 (with taxpayer ID #) to the seller, of which a copy is sent to the IRS. Just like your stockbroker must report your stock sales to you and the IRS at year end.
If you have no closing agent, I don't know if you are required to do that or not. I would contact the IRS for clarification.
Good Luck !
[addsig]
If your attorney(s) are going to look over all of the trust documents, why not consult them now before you invest too much time. From my accounting background, I believe any 1099 has to have a SS #. It seems best to consult a lawyer on the legality of the transaction.
I don't believe it is against the law not to have a SSN. In fact I know a few who don't. Neither is it illegal to pay with $100 bills, gold, silver, or old bath tubs.
If a title company is willing to give title insurance and the deal is good enough to make it worth the hassle then go for it.
In this case I am sure he probably owns it free and clear anyway as I doubt a lender lent without all the normal i.d. etc. IN this case I return to "title insurance" pay him what he wants and let him deal with his issues. Up to 250K profits on a primary residence are untaxed and unreported anyway.
there are no papers that "must be filed with a government agency". But... you would probably want to record the deed to establish ownership and priority at the courthouse.
At any rate this is interesting and a challenge
[addsig]
Just checked SSn website, Not required to have an SSN unless there is a state specific requirement to that effect..
In summary - my attorney says that she has to review the trust papers so that it is clear who has authority to sign the deed so that I can get clear title. She also says that I should not buy the trust but get it deeded over to me or my LLC. It is a kooky trust and I would just be buying trouble. She also says that she has an obligaiton to report to the IRS and would need a TIN or SSN depending on how the trust is setup. The trustee has an obligation to report obligation to file form 56 or 56a with the IRS. I have no resonsiblity to report. My lawyer is willing to do the title search, get me title insurance, prepare all the papers, but then let the Seller and me close as individuals. That way the burden of reporting is on the trustee and no TIN or SSN is required.
Brenda