IRS Real Estate Fraud Investigations Double

An Internal Revenue Service crackdown on real estate fraud and tax evasion has resulted in a doubling of investigations by the IRS Criminal Investigation Division between 2001 and 2003, according to a new fact sheet. Similarly, the average prison term handed out by federal judges to defendants in these schemes nearly doubled over the same period. The IRS said that it is focusing on real estate fraud because the income earned from it is often laundered to hide the proceeds, and is often inseparable from tax evasion. Currently, the IRS has thousands of returns under audit involving individuals and entities associated with the real-estate business. "Every year, these fraudulent schemes victimize individuals and businesses from many walks of life, including struggling low-income families lured into home loans they can't afford, legitimate lenders saddled with over-inflated mortgages, and honest real estate investors fleeced out of their investment dollars," the IRS stated.