Just posted on my Local Market Information page (http://www.ehomesbymorris.com/custom3.shtml), an article from today’s Wall Street Journal Market Watch: Home-buyer tax-credit refunds delayed for months.
Obviously, that isn’t really “local” news, but it is important to me that my clients and prospective clients are never surprised by information that I could have shared with them.
This administrative snafu really shouldn’t be surprising, but many of the checkpoints now requiring an audit seem very predictable. In other related articles, there have been stories of
— “Taxpayers” as young as four years old requesting this tax credit. Form 5405 and all tax forms require a SSN of taxpayer ID of some kind, from which DOB should be easy to verify — automatically.
— Others, it turns out have owned a home within the past three years, or even own another home now. It seems to me that in most cases this was more than just an innocent oversight. Audit away, IRS. Condoning or ignoring these makes it much harder for folks who play by the rules.
— Many taxpayers have apparently requested the “first-time homebuyer tax credit” without actually buying a home! Again, I can’t imagine anything but intentional fraud here. But this should have been “falling off a log” easy to avoid: All year I have advised my clients to include a copy of the HUD-1 Settlement Statement, confirming their completed purchase, along with Form 5405. To me, it was simply a common sense way to minimize delays in processing tax credits for my clients, but …
The basis for this entire, very expensive, program was to encourage people to buy homes. Why didn’t somebody at IRS think to require that the most basic, and readily available, proof that such a transaction occurred should be part of every filing?