More than four years after Congress passed legislation endorsing the use of a key financing concept for home buyers -- equity sharing or co-purchasing -- the Internal Revenue Service has not published final regulations implementing the law and has no definite timetable to do so.

As a result, taxpayers are exposed to unnecessary uncertainties regarding what the government will allow them to do legally, according to home buyers and lawyers seeking to use the cost-cutting technique.

In some cases, taxpayers are facing IRS field auditors who are unfamiliar with the equity-sharing provisions Congress has enacted. For example, an auditor has threatened a home buyer in a midwestern city with more than $8,400 in tax penalties for co-purchasing a home three years ago with his son, using what he insists were equity-sharing provisions sanctioned by Congress.

The home buyer, who asked not to be named, said the IRS auditor claimed ignorance of the 1981 legislation and demanded a copy either of the departmental regulations or the text of the law before considering whether to relent on imposing the tax penalties.

Asked about the status of the regulations, Paul A. Francis, assistant director of IRS's legislation and regulations division, conceded that "we have fallen behind schedule on this." He could offer no target date in either 1986 or 1987 for issuance of the rules, despite the four-year hiatus following congressional action.

"We're simply backed up here," Francis said.

The IRS rules are important to widespread use of the equity-sharing technique by home buyers because tax benefits play essential roles in typical transactions.

Here's how equity sharing works: A home buyer who doesn't have the full down payment to qualify to purchase the house he wants, or who doesn't have the income to handle monthly payments at regular market rates, can join with an equity investor. The investor, who often is a relative or friend, puts up all or a portion of the down payment necessary to secure a mortgage. The investor also may agree to make additional contributions to the monthly debt service and taxes, if that's The IRS rules are important to widespread use of the equity-sharing technique by home buyers because tax benefits play essential roles in typical transactions. In some cases, taxpayers are facing IRS field auditors who are unfamiliar with the equity-sharing provisions Congress has enacted. necessary to swing the deal.

The purchasers -- typically younger, first-time home buyers -- get to live in the house and use it exclusively as their principal residence. In exchange for the financial contribution by the nonresident investors, the resident co-owners generally agree to pay a fair-market rental to the investors every month and to give up some percentage of their ownership equity to the nonresident investor.

The investor's equity share, or stake in the unit, can range from a minority proportion (say 5 or 10 percent) to 80 percent and higher, depending on what the parties agree to.

The periodic rental payments from the occupants to the investor then are based on that equity percentage. The occupants pay rent, in effect, for their use of the co-owner's part of the home. If that share is 50 percent, the occupants pay half of the going rental rate for the house by local market standards. If the nonresident's share is 25 percent, the occupants pay one-quarter of what would be the going local rental amount.

The equity investors thus get periodic rental income from their unit, plus the tax advantages of owning residential property. They can depreciate their share of the home using the accelerated-write-off schedules permitted under existing tax law. They can deduct their proportionate share of all business expenses -- such as maintenance and repairs, depreciation and utilities -- plus any property taxes and mortgage interest that they actually contribute.

When the time comes for sale of the house, or a "buyout" of the investor's share by the resident co-owners, the investors also can enjoy their fair share of any capital gains racked up by the property.

Informal equity-sharing among relatives has been part of the American home-buying scene for decades. But until Congress amended the tax code in late 1981, the "rich uncles," aunts, parents and outside investors who contributed portions of down payments were prohibited from taking rental-property deductions, particularly depreciation, on their loans.

Now they find themselves in a legal quandary. On the one hand, Congress' sanctioning of the basic concept opened the door to thousands of related and nonrelated copurchasers. On the other hand, numerous legal questions have arisen regarding the nature of the equity-sharing agreements acceptable to IRS tax collectors. These are the precise questions that normally are remedied through IRS issuance of formal regulations.

For example, although Congress called for "fair-market rent" to be paid by the occupant co-owners to the absentee co-owners, IRS guidance is needed on what constitutes such rent. Many equity-sharing co-ownership arrangements among family members count maintenance and repair services performed by the occupants as part of the deal.

A son and daughter-in-law, for instance, might pay $350 a month to a father in cash for rental of a co-owned town house, but count an additional $100 a month in maintenance services and record-keeping toward the total $450 monthly fair-market rent.

Is such an arrangement legal? Without publication of departmental regulations, even lawyers at the IRS won't offer an opinion. Dozens of other unresolved technical issues on equity sharing exist, lawyers and accountants say.

For the time being, though, taxpayers -- and even IRS auditors -- apparently will have to grapple with them in the dark.