Participating in REI w/out filing 1040

[Blake B.]

*Note: this post is intended for investors who actively DO NOT automatically file a 1040 every year, unless they've incurred a tax liability.

I'm wondering what difficulties investors who understand (have read the pertinent details of the tax code) have faced when engaging in investment opportunities that normally require an investor to furnish tax returns, and what solutions have they come up with.

From my experience in banking, I understand that institutional lenders normally require a borrower to furnish yearly personal financial statements and tax returns. I think the latter requirement could be overcome with a letter from the IRS confirming a $0 tax liability for the years requested; however, I haven't seen this scenario unfold as most people never take the time to fully understand the contracts they (don't) enter into.

What are some situations you as an investor have faced that would normally require a tax return that you were able to work around and how so? (maybe it was a syndicated deal, JV, etc?)