REALTORS® want the Senate to pass H.R. 1677 or companion legislation to help correct the problems associated with identity theft and providing the sellers? social security number on Foreign Investment in Real Property Tax Act (FIRPTA) affidavits that go to the buyer.

Our concerns include:

• This fix would allow for smoother transactions for the buyer/seller and tax collection for the IRS.
• This fix would not alter the intent of FIRPTA.
• Minimal costs or loss of revenue with this fix.
• This fix would be taking a preemptive measure to help combat the problem of identity theft.
• The current program unfairly puts burden on the buyer.  If a seller is fearful of identity theft and does not properly fill out the form with his taxpayer identification number, then the buyer is responsible for this mistake.  This fix would eliminate the fear of identity theft, therefore putting the burden back on the seller to provide his taxpayer identification number.

General Background:

Over the past several years as identity theft has become more of a concern for everyone, sellers have grown increasingly uneasy with providing their taxpayer identification numbers.  The concern has become so great that some sellers are refusing to provide the required non-foreign affidavit to the buyer or are providing an affidavit with the seller's taxpayer identification number removed.  This creates a dilemma for buyers' who may be liable for the sellers' tax liability from the sale of the real property if they do not receive a fully completed sellers' affidavit. 

On April 17, 2007 the House passed H.R. 1677, The Taxpayer Protection Act by a vote of 407-7.  Included in H.R. 1677 was the FIRPTA fix that C.A.R. has been working on.  C.A.R. has been working diligently with NAR and House Ways & Means staff on getting a FIRPTA fix introduced that would allow the seller to provide the non-foreign affidavit to a settlement provider instead of the buyer.  As you know, this has been a long standing issue that has had trouble gaining traction in Congress.

Thanks to the help and efforts of Congressman Mike Thompson (D-CA), C.A.R. was able to get language attached as an amendment to H.R. 1677.  H.R. 1677 was voted out of the Ways & Means Committee on March 28^th with the FIRPTA amendment attached.  H.R. 1677 was introduced by House Ways & Means Chairman Rangel (D-NY) and Oversight Subcommittee Chairman Lewis (D-GA). 

C.A.R. and NAR are still working on some minor changes to the language.  However, these changes will have to be in the Senate version of the bill as H.R. 1677 was put on the House calendar under suspension rules, which means no amendments were allowed.