Posted on 10/28/2013 12:19:03 PM PDT by NH Liberty
Can anybody cite the law that exempts people (Sellers) from divulging their SS#s during real estate transactions?
I know this can be done (at least in NH) because I was at a closing 8.5 years ago, where the Seller was refusing to release his. The in-house lawyer was then called upon and, when he came out, he and the Seller had a bit of a back-and-forth about it in front of everyone. The Seller then told the lawyer that he could prove it to him if he'd just come with him outside the room (presumably out to a telephone?). When they returned a few minutes later, the lawyer looked dumbfounded, and was shaking his head as he told us all that, "He's right. He doesn't have to provide it."
If anyone could cite the law for me, it would be very much appreciated.
Thanks.
I know this can be done (at least in NH) because I was at a closing 8.5 years ago, where the Seller was refusing to release his. The in-house lawyer was then called upon and, when he came out, he and the Seller had a bit of a back-and-forth about it in front of everyone. The Seller then told the lawyer that he could prove it to him if he'd just come with him outside the room (presumably out to a telephone?). When they returned a few minutes later, the lawyer looked dumbfounded, and was shaking his head as he told us all that "He's right. He doesn't have to provide it."
If anyone could cite the law for me, it would be very much appreciated.
Thanks.
A better question would be to cite the law that REQUIRES the SSN to be divulged.
Simply ask the real estate agent to provide you with a copy of any state law requiring them to obtain your social security number for their records. If no such law exists, then you are not legally obligated to reveal it.
Cheers!
Oops, sorry. I didn’t see your comment before posting mine.
Great minds think alike!
Cheers!
I would be surprised if you didn’t have to disclose it, the money will be income and surely someone is required to report it to the IRS, that form likely requires your SSN. I can’t see how to get around that. I will be interested in answers you get though. There might be a way to keep some people from getting it, say the buyer, but I would think someone needs it if money changes hands. Even in a Real Estate trade I am pretty sure it has to be reported.
From what I understand, a real estate company isn’t considered a “financial institute.” Unless the Patriot Act has changed all of that, a real estate company still falls under the category of a private business.
From PrivacyRights.Org:
https://www.privacyrights.org/fs/fs10a-SSNFAQ.htm
[...]
Usually you are not legally compelled to provide your Social Security number to private businesses unless you are involved in a transaction in which the Internal Revenue Service requires notification. The Patriot Act requires financial institutions to verify customers’ identities, which can involve the SSN.
There is no law, however, that prevents businesses from requesting your SSN, and there are few restrictions on what businesses can do with it. But even though you are not legally required to disclose your SSN, the business does not have to provide you with service if you refuse to release it. So in a sense, you are strong-armed into giving your SSN. This is often the case when applying for insurance and opening utility accounts.
But don’t give up. Be sure to ask if there is an alternate number that you can provide to the company, such as your driver’s license number. Also ask if you can provide a deposit rather than giving your SSN to the company.
[...]
Cheers!
No a real estate company is not considered a financial institute, but likely someone has to report the transaction to the IRS on a form. I imagine most of the time it is done by a financial institute and the SSN is on the loan papers- but what if the buyer is paying cash? If there is no loan involved then why would a financial institute be involved?
I in fact knew a couple several years ago- before Patriot Act that saved money over many years and paid cash for some land. They were contacted by the IRS and were required to explain where the cash originated. The couple did not have the money in the bank so it was not the withdrawal that triggered the IRS involvement. Someone involved in the transaction had to have reported it. Possibly realtor, I don’t know.
If the original poster is saying he did his loan papers with SSN (provided to financial institute) and now the realtor also wants his SSN or wants it on papers that may be seen by random people (buyer, realtor employees, etc.) then I understand the concern and would not think he would have to provide the number- not legally compelled.
I truly don’t know how it works, but I bet someone is obligated to report it and they would need SSN in order to report it.
If you sell a house the only money that would be counted as income is the profit on the sale. If you buy another house of greater value within a certain time period you don’t have to claim even the profit as income. Plus, the real estate people have nothing to do with reporting income, only the financial institute loaning the monies and even then I doubt they have control over the seller’s part of the bargain.
I cannot imagine that a real estate sale and or purchase would not need to be reported by someone. Often there is significant money involved and yes many times that money is on paper not actual money, and there may or may not be taxes due when it all shakes out but there are transactions with large down payments and cash transactions so I would think reporting by someone is required. Maybe not every transaction is reported but I would think many are reported. I hope realtors/attorneys/etc. will post how it works.
Great point.
In California they force the escrow company to withhold as if the entire sale price is profit. You then have to wait until you file your taxes the following year to get back the difference between what they took and the actual net gain.
They're sitting on $83K of my money now, and I have to wait until next year to get some/most of it back.
Just to be clear -- It isn't a real estate company that asked for it (the transaction is a FSBO), but the Title company did. As you said, it is a private business, and I don't know why they would need it. It just seems unnecessary to have these numbers floating around out there, with no legitimate reason for it.
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