First-Time Homebuyer Credit Under Tremendous Scrutiny by IRS

The First-Time Homebuyer Credit (FTHC)–where qualifying taxpayers can receive up to an $8,000 tax credit–is under tremendous scrutiny by the IRS as it has been earmarked this year as a credit that is likely to be abused.  This is not surprising considering the huge amount of money the IRS could stand to lose due to erroneous claims.  However, those that legitimately qualify for this credit MUST be diligent in the documentation they provide in order to receive this credit.  The IRS has just released a clarification on one of their requirements:

The IRS encourages buyers seeking the homebuyer credit to sign the settlement statement when they file their tax return — even in cases where the settlement form does not include a signature line.

When the IRS “encourages” something, it is highly recommended that taxpayers follow their instructions; especially if you want your tax return processed without unnecessary delays.  R&G Brenner has learned through first hand communications with the IRS that their auditors are being stretched thin due to the increased scrutiny of the FTHC.  Virtually all of their other duties including correspondence and desk audits have taken a back seat; not good news for taxpayers that are waiting on an IRS determination as this has added processing time to an already long and laborious process.

R&G Brenner recommends that all taxpayers planning on claiming the FTHC for tax year 2009, familiarize themselves with all the neccessary documentation and the signatures the IRS is requiring.  You can do so by clicking on the source links below.  If you are an R&G Brenner client, be sure to review the requirements with your tax professional before you send your tax return to the IRS.

Source: IRS.gov & IRS.gov