The Internal Revenue Service is taking a more conservative approach to issuing tax identification numbers to foreign real estate investors, a decision that threatens to slow down the growth seen in South Florida’s luxury market.
The IRS is responding to an increase in the number of fraudulent tax returns and identity theft.
“Until recently, if a client wanted to start a company to buy real estate or start a business, we could call the IRS, fill out the form and fax it over,” said Adam Seligman, real estate lawyer and a partner at Ward Damon Posner Pheterson & Bleau in West Palm Beach. Now he added, “clients ready and willing to spend millions of dollars to buy property and hire employees are sitting there just waiting on the IRS.”
But since January, foreign real estate investors must to wait six to 10 weeks for approval, according to the Daily Business Review. And instead of same-day decisions, applicants are being made to submit original documentation or certified copies from issuing agencies, which the IRS then checks for authenticity. [Daily Business Review] – Christopher Cameron