Bank Statements & IRS Forms in DD??

[Oren K.]

As a Canadian looking to invest in commercial in the US, I (not surprisingly) do a fair bit of reading on the topic. According to a number of books / articles, it is NOT uncommon to request several years tax returns and bank statements as part of the DD package.

The thinking being that while people may play a bit fast and loose with representations or declarations, no one wants to screw with the IRS. Also, that bank statements are more reliable then any self declarations or unaudited financial statements.

I have not seen this in either offers made to us nor have I ever asked for these items (perhaps we should??) here.

Is it accepted practice in US commercial transactions to request either bank statements or IRS returns related to a specific property? If so how far back is 'normal'?