This coming tax filing season, we're going to enter a new phase of the first-time homebuyer tax credit. Why should the next round of this tax boondoggle break be any different that from the confusing claim process?
OK, maybe it won't be full-fledged chaos when the IRS starts processing 2010 tax returns upon which repayments of the original 2008 faux $7,500 credit begin.
Y'all do remember that when it was created, the so-called credit was really just an interest-free federal loan, don't you? And loans, despite what some homeowners think, must be paid back.
But I'll guarantee that this coming tax-filing season, affected taxpayers and the IRS are going to be spending a lot more time making sure that the first-time homebuyer credit repayment rules are met.
Official word is "uh-oh": I'm not the only one concerned.
The IRS watchdog says some taxpayers will probably get incorrect notices of their tax credit repayment responsibility. Others who must start paying back the $7,500 on their 2010 tax returns might not even be on the IRS radar.
Then there are those who claimed a version of the credit, but didn't live in the houses long enough (three years occupancy required in most cases) to keep the tax break money. In those cases, the credit has to be paid back, too.
And, as Tax Update Blog notes, there's the major challenge of ensuring that the 798 individuals identified by TIGTA as being dead before they bought their homes are entitled to claim the first-time homebuyer credit.
Show of hands from those who are surprised that this next phase of the credit is likely to be problematic. Anyone? Me neither.
This tax break has been confusing, frustrating to taxpayers as well as the IRS (remember how it prevents folks from e-filing, thereby adding even more time to return processing, not to mention audits) and scandal ridden since its inception. Why should this next step be any different?
Let's just all keep our fingers crossed for the next few weeks that Sept. 30 comes and goes without any more futzing around with this part of the tax code.
And then get your digits ready for crossing again, or for making some other display you might deem appropriate, when the first-time homebuyer credit repayment collection process starts in the upcoming tax filing season.
- Homebuyer tax credit final deadline is Sept. 30 ... maybe
- Homebuyer tax credit extended; closing date
deadline is now Sept. 30
- Implicit support for continuation of the first-time homebuyer credit?
- The homebuyer credit: It's baaacckkk!
- Putting the homebuyer credit to rest
- 'Successful, costly' first-time-plus homebuyer credit ending
- The federal homebuyer credit's 'exit strategy problem'
- Tax policy and the American homeownership dream
- $10 billion paid out in home buyer claims, but how many
- Homebuyer credit semantics
- Homebuyer credit sales, related audits up, but other IRS audits likely to be lower
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