Unbeknown to homebuyers, real estate agents and the mortgage industry, the IRS is giving behind-the-scenes instructions—that are not available to the general public—to CPA’s and tax advisors on how to file for the home buyer tax credit after Nov 6, 2009. It will be completely different than what you might have been advised previously—and your are NOT going to like these changes!
The first shocker? You cannot file a 1040 EZ to claim the tax credit! Nor can you file tax returns electronically if claiming the tax credit!
Why no electronic filing or 1040 EZ forms?
It’s the first step in stopping fraudulent tax credit refunds. Believe it or not, the IRS never had a way to determine if a person owned a home—no auditing software in place--to determine if they previously claimed a “mortgage interest” deduction within a 3-year time period. The IRS is building “auditing software” now to “catch” previous homeowners who are trying to claim a FTHB tax credit.
Secondly, the IRS now requires that the HUD 1 or closing statement be attached to the 5405 form (and that cannot be attached electronically).
Third, speaking about the 5405 form…unless the home was purchased on or before November 6, 2009, currently there is NO FORM on the IRS website to file the amended return.
The IRS is telling tax advisors to expect an average of a 16-week turn around time…which means that it could either be the refund OR a request for additional documentation.
So, if you are expecting an income tax refund AND a homebuyer tax credit refund, BOTH refunds could be held up for several months.
No comments:
Post a Comment