If you are looking to take the $8,000 Home-Buyers Credit you better have you ducks in a row according to reports coming out of Washington. The IRS is going to be paying special attention to those taking the credit on their taxes.
The powers that be in Washington are smart, never forget that. And craft. And sneaky. So you go and buy a home and qualify for the credit. Congratulations.
But now you have to worry about applying for it because what if you made a mistake on your taxes. You know the code is only 67,204 pages long? And if you do anything that is considered in the gray area and they find it you could be opened up to a full audit going back a number of years.
And it is interesting this story did not come out 6 months ago when the government needed the housing market stimulated. Instead it is coming out when the program is winding down and the government is going to have to pay out the money they promised.
It reminds me a bit of the stings that the police do. You know, the ones where they call criminals up that they have not caught yet and tell them they won Super Bowl tickets. Then when they show up to claim the prize they are arrested?
Instead, it is the government offering money for a reason and then threatening an audit the minute you apply for the money.
The Internal Revenue Service is examining more than 100,000 suspicious claims for the first-time home-buyer tax break, another sign of potential trouble for the soon-to-expire program.
The measure, adopted in February as part of the economic-stimulus bill, gives first-time buyers an $8,000 tax credit in an effort to boost sales and stimulate the moribund housing market. The program is set to end Nov. 30, but housing-industry leaders are lobbying Congress to extend it.
More than a million claims for the credit have been received so far, and housing-industry experts estimated that the credit has helped generate about 350,000 home sales that wouldn’t otherwise have occurred. But some lawmakers and tax experts now say there is evidence that a significant number of the claims might prove to be unjustified, or even fraudulent. via WSJ.com.
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I have heard estimates that the 350,000 homes equals about $43,000 tax credit per home since the rest would have occurred anyway. Bad deal for the tax payer. http://toughmoneylove.com/2009/10/20/fraud-waste-…
I’m wondering how much it will cost to review 100,000 tax returns. I’m not saying that people who defraud the government should get away with it but it seems that it will be expensive to review, then audit, the prosecute.
Again with the alarmist attitude! What’s with you lately? No one is “threatening an audit the minute you apply for the money”. It’s nmore like “there is evidence that a significant number of the claims might prove to be unjustified, or even fraudulent”.
Geez, you’re starting to use Fox News tactics.
> interesting this story did not come out 6 months ago
Indeed. The way we're getting *the complete opposite* of transparency, I'll wager we're in for more surprises.
Good. I bet there is a lot of fraud and I am glad that they are watching for it and investigating what they can. People who abuse the system need to be punished very harshly.
-Tyler
Fraud Reported in Program to Help New Homebuyers
http://www.nytimes.com/2009/10/23/us/politics/23h…
Those poor fraudsters. I sure hope the IRS does not investigage and audit them. Wouldn't that be awful!?
as a person who qualifies for this credit, it is really disheartening that it's taken me about 8 months to get to the point where they've disallowed my claim because i didn't respond to their request for additional information. i did respond to their request, sent them everything they asked for, and i sent it certified mail. they received it on Jan 4th and their letter that says they never received it is dated Jan 25th. i originally mailed my forms for the credit last may, but they never received those. i re-applied in september and sent the forms certified. i am not trying to scam anybody, and i spent all of my savings on my down payment. i would not have done that if i didn't know about the housing credit in the first place.
I feel your pain, going through this right now… just sent my third round of "additional information" in yesterday. Prayed over it before I sent it on its way. Dont have 10K they say I have to repay. 8K for the credit and 2k in penalties and interest….
I qualified for the 2nd time homebuyers credit and have to send the irs what seems like copies of half my file box. Good thing I was not in any kind of a hurry cause it looks like I am going to be in this mess for quite some time before ever getting a dime. Too bad they didn't spend as much money advertising that it would take months to get the credit as they did on telling us we would get it.
Hi! Me again. Finally got IRS to respond to my calls. I was told that approx. 90% of the homebuyers applying for Tax Refund are being audited. They say it is due to fraud but I gotta wonder if a lot of those are people who just didn't get the right information turned in. My heart goes out to the people who used every means possible including borrowing $ to get up the down payment and are counting on the tax refund to get solvent again. Seems to me that there are no problems giving congress great perks and giving money away to all the special interest but when it comes to those who have tried to upgrade their lifestyle buy investing in a new or newer home…well don't you just know these are the people who are gonna be targeted.
Well me and my wife decided to buy a decrepate house that was a couple years old and was already in foreclosure. The a/c was shot and there was alot of electrical and plumbing problems. We spent most of the tax credit on fixing these things. Now we have been audited. This is rediculous, I had a crappy little savings account that had taken more fees than given interest from bank of america ($150 and they claimed $25 interest, yea right). They wanted $25.00 for that. Then they wanted $2k money from me from 2008(thousands) . I was literally starving and still am, just trying to make the best of the "american dream" . Guess it is just a dream. Now the feds are after the company i am working for now. Its bad enough nobodys paying thier bills, now this.
So i went along with the crap they sent me, gave them my bank info got on an automated payment system. Now I got a certified mail sticker on my Doorbellless door. Wonder what sort of thing they are gonna try now. Its so sad that most everything "made in America" is a rip off. All services, all finance companys, all government agencies, services, rely on essentially charging as much as possible.
And what if we ended the war in iraq, what would all those ladies and gents do to get jobs, oh yea…..they go to school on a gi bill and then get disability cause the civilian market is crap.
We stupidly and greedily opened a hole in the earth…don't ya think oil has another purpose since automobiles have only been around a couple years and oils been for billions of years. And that little devil in Louisiana wants to keep drilling.
Afganastan is being taken over for their lithium deposits, 1/5 of all soldiers who have lost thier lives have had nothing to do with enemy contacts. Its heavy powerful stuff that goes boom. Maybe I'll be next on the goverment hit list after the fishing boat captain that just got snubbed for knowing the gulf problem is unfixable…….and the seas turned red, sound familiar. I know god, i love god, a return is needed. All theses swindlers we got, hmm what happened to all the swindlers in the late thirties????
I am about to loose my job, thats why you see the military stats. That is going to be my only option soon and I can just barely make it in. As for the thing I said about afganistan, I don't think its wrong of us. If america does not intervien then the top 3% will be sharing the lithium spoils while the rest of the country is starving and in despair. The curruption needs to be eliminated. We just gotta be up front about this kind of thing. And fair tax is the way to go, so obviuos. The IRS wouldn't loose thier job, just do things differently, looking for tax cheats per transaction. Duh.
I spoke with an IRS person in regards to my refund and was told by him that approx. 90% of the applicants were being audited because there is an alarming number of people commiting fraud. I have received 4 sets of letters (that is 4 duplicate letters…2each in 2 separate envelopes). What is the deal with that…talk about government waste. That is 3 extra sheets of paper, ink, and the extra postage times 90% of the people trying to claim the tax refunds. Hmmmmmmm, I would venture to say that the figure is much greater than the $5100 they owe me. By the way, I bought my home in December 2009. The tax incentive program sounded real good…too bad they didn't tell us that we might not live long enough to get it.
9 monthes waiting here every month irs sends a letter stating they need more time president promised change hes right i have 2 pennies in my pocket
In early March I applied for the $6500 new home rebate after selling my previous home where I lived for 30 years. After six months of waiting, all I get are IRS letters that they need the "HUD form for the new home". These were sent by my accountant in March, sent them again and finally the local IRS in my city sent them and to this date they claim they did not receive them. The IRS office here told me I did everything right and had no explanation why I am now asked for
a list of other documents over the past 5 or 8 years and I was referred to the Tax Advocate Office who is working on the problem. The IRS up to this morning, after 7 months, still claims they of none of the documents on record. This "catch 22" situation
seems to have no end and there is no way to fight this government abuse. My records are a clean as a whistle and while I know they have issues of fraud out there; but they seem to be committing fraud. They promise a new home rebate in one hand; then, take it back with the other.
December of 2009 is when we filed our 8000k credit…….it's now 1/2/11 and all I have to show for it is a file full of letters saying I will have a response in 45 days……if it were any of us owing the IRS 8000k you can bet they would want more than just a letter saying we might pay you one day! It makes me sick to open those letters knowing that we did the right thing, went through all the steps, and have spent our savings to put the down payment on our home only to get shafted by the government. It's a sad, sad thing to deal with and I wish every person who has looked at my paperwork and then denied my claim could be in the situation we are in…..they may feel differently afterwards.
I received a letter today from the IRS…its seems to me that they need to get there act together. Why 2yrs after you give me the 7500.00 and I have to start paying it back this year you need proof of residency, my DL, bank stmnt, mortgage stmnt and my new home paperwork. Telling me that my 2010 refund will be held up during review…great I already cant file until Feb 14 because of the new tax laws and now this….and reading what everyone has to say above it doesnt look like even if I send the pprwk certified they are going to get it. Maybe I am worrying un-necessarily and because of fraud they are asking for this info…but why now. So frustrating.
OMG ~ I am so in the same boat as these posters. I pray it works out for all of us HONEST/WORKING taxpayers…
Oh my husband and I are still sending the same stuff to the IRS. This is crazy….We qualify for this credit and now they have added penalties ,(which since have been removed) and interest and they kept our return this year. Our home was forclosed on 10/31/2005…..we lived with his parents for 6 weeks until the rental home was available. We lived in the rental house from 12/17/2005 – 11/28/2008 when we purchased our new home. And we are jumping through hops now because the IRS says we do not qualify now and they want $12,000 from us with all of the interest. CRAZY!!!!!!!!!!!!!!!!!
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