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In reply to the discussion: STOCK MARKET WATCH -- Friday, 30 November 2012 [View all]Demeter
(85,373 posts)11. Someone Noticed the IRS isn’t Enforcing Tax Laws in the Mortgage-Industrial Complex?
http://www.nakedcapitalism.com/2012/09/mirable-dictu-has-someone-noticed-the-irs-isnt-enforcing-tax-laws-in-the-mortgage-industrial-complex.html#z5yhT3tFJuxommSZ.99
Reader Deontos highlighted a post on Reuters by two Brooklyn Law School professors, Bradley Borden and David Reiss, on a subject near and dear to our hearts, the abject failure of the IRS to take interest in widespread, probably pervasive, violations of REMIC, the part of the Federal tax code that governs mortgage securitizations.
The reason this matters is that this situation belies on of the Administrations pet claims, that its hands were tied as far as addressing the foreclosure mess was concerned because it had no leverage over servicers. As well discuss, in fact the Administration has a nuclear weapon in its hands that it is simply refusing to use.
The reason the Borden and Reiss piece is noteworthy is its the first time Im aware of that experts have chosen to comment at length on the REMIC issue, suggest that there is likely a BIG problem here, and politely point out that the REMICs may have committed fraud, which would allow the statute of limitations to remain open indefinitely, giving the IRS plenty of time to investigate and litigate.
However, I suspect the professors have heard that the IRS is choosing to do nothing, as their quote of Lee Sheppard at the top of their piece suggests:
We suspect they know full well the Wall Street Rule is being applied here...
Reader Deontos highlighted a post on Reuters by two Brooklyn Law School professors, Bradley Borden and David Reiss, on a subject near and dear to our hearts, the abject failure of the IRS to take interest in widespread, probably pervasive, violations of REMIC, the part of the Federal tax code that governs mortgage securitizations.
The reason this matters is that this situation belies on of the Administrations pet claims, that its hands were tied as far as addressing the foreclosure mess was concerned because it had no leverage over servicers. As well discuss, in fact the Administration has a nuclear weapon in its hands that it is simply refusing to use.
The reason the Borden and Reiss piece is noteworthy is its the first time Im aware of that experts have chosen to comment at length on the REMIC issue, suggest that there is likely a BIG problem here, and politely point out that the REMICs may have committed fraud, which would allow the statute of limitations to remain open indefinitely, giving the IRS plenty of time to investigate and litigate.
However, I suspect the professors have heard that the IRS is choosing to do nothing, as their quote of Lee Sheppard at the top of their piece suggests:
They take aggressive positions, and they figure that if enough of them take an aggressive position, and theres billions of dollars at stake, then the IRS is kind of estopped from arguing with them because so much would blow up. And that is called the Wall Street Rule. That is literally the nickname for it.
We suspect they know full well the Wall Street Rule is being applied here...
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I asked this question over in GD. (I know never stick your hand in the crazy) but,
Hotler
Nov 2012
#6
I saw the same thing on another network last week. They confirmed that it was bullshit.
Fuddnik
Nov 2012
#9
Someone Noticed the IRS isn’t Enforcing Tax Laws in the Mortgage-Industrial Complex?
Demeter
Nov 2012
#11
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Demeter
Nov 2012
#24
As Rumors of 'Grand Bargain' Cuts to Medicare Swirl, Progressives in Congress Say No Way
Demeter
Nov 2012
#22
No Wonder So Many Are Disillusioned by Our Politics -- We've Got an 18th Century Political System
Demeter
Nov 2012
#23