Unsubmitted tax returns to qualify for a loan

Excelsius · Joined: 06 Jan 2010 Posts: 4

My friend is a student and always does his taxes himself. This year he wants to buy a home so he can live near campus. The problem is that he hasn't done his taxes yet and he needs to show his most recent tax year income to qualify for a loan because he made more money than usual. We were talking the other day and he told me that he has a dilemma with deductions and the amount of income showed. He wants to submit his application soon, but he does not have enough time to go through all the deductions. Then he brought up an interesting point: what if he just finishes his taxes for now with TurboTax, does not submit it to the government yet, print the tax return for loan qualification purposes, and then go back before April 15 and add whatever deductions he missed and this time submit it to the government with the schedule C? I told him that the loan officer might figure out that his taxes were not submitted yet, but he said that they do not have access to your taxes, even though they have your social security number. I was wondering what some of the experienced loan officers think about this because I don't know enough to know whether he is right or wrong. I know he's a bright guy, so he must know what he's doing.

Haplo · Joined: 20 Jan 2005 Posts: 2422 Location: Springfield, IL

The tax returns submitted to the bank are to be the tax returns filed with the IRS, not just a dummy return that he created to show things in a better light.

Also, yes we do have access to your tax returns. Part of lending these days (I assume for everyone else) is validating that the income on your application is at least similar to what your tax returns filed with the IRS state. If it's off, you need more documentation.

If he does what you're suggesting he's committing fraud by falsifying his tax return in order to get a loan.

joe1 · Joined: 11 Nov 2008 Posts: 20 Location: California

Let me ditto that Haplo. If your friend wants to buy a home, he needs to pay his taxes. Completing his tax returns should be a top priority. Committing fraud is never a good idea.