From CNNMoney.com, we have just learned that the way the IRS is "handling" the tax credit is turning into yet another stumbling block to helping the real estate market recover. This seems to me to be so unfair! Anyone who qualified for the credit probably could really use that money, whether to repay mom and dad for the down payment loan or as cash to repair that fixer-upper they bought. I'm going to email the article and link this out to my clients IRS Form 5405.
Home Buyer Tax Credit: No e-file and four month delays
On Thursday, CNNMoney revealed that buyers who purchased their properties after Nov. 6 were unable to claim the refund because the Internal Revenue Service had yet to release a new form and instructions. But on Friday, the IRS finally posted the new form 5405.
The two-month delay was frustrating to Florida resident Charles Teschke. "We are not broke or anything, but nevertheless we were still counting on getting the tax refund to help pay for the appliances and stuff we needed for our new home," he said. "The IRS told me they estimate it will take four months for me to get my refund!"
First-time buyers were able to immediately file for the tax credit after Congress approved it last February as part of the stimulus program. All they had to do was file an amendment to their 2008 tax returns (the ones they filed last April) and claim the promised refund of 10% of the purchase price, up to $8,000.
This post was written by Leslie Ebersole of Baird & Warner Real Estate.
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My Email leslie.ebersole@bairdwarner.com
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Thanks for the link.
I have folks call me and ask me this all time, "how long does it take?"
Some have been waiting months.
Great info! Thanks for the link. I've added it to my shortcuts already!
This will be going out to my clients today. Thanks.
Helpful information...for our clients.
Thanks,
Jennifer Yarsulik
Thanks for sharing this with Active Rain community. Buyers have to be awared of these specific information in order to be able to file and credited correctly!
All in all this is a good thing though because it is reducing scams and folks who purchase a house should not need the money instantly or count on it being there immediately. Buying a home costs money and this should be considered a nice gift in the future.
There wase just too much fraud with the old way of claiming the credit. The irs reported a 4 year old trying to get the credit. Couple bad apples ruin it for everyone else. Now you need to file a paper return attach your closing paperwork and need to answer a lot more questions regarding the parties involved.
I don't mind that there is going to be a delay in receiving the credit for my clients.
Options: If your client is expecting a refund without the HB tax credit. They can e-file the normal return and receive their refund in 8-15 days depending on the irs cycle and then file an amended return for the homebuyer credit. This is a pain and extra work but if they are in a hurry it is an option.
Thanks Leslie. I have heard that it could take up to 4 months for them to get their refund.
That is really surprising that they aren't allowing e-file for this -- how unfortunate!
Thanks for the great post. I didn't know there was this much of a delay.
Yeah! Thanks for the update. Will email this form to two of my clients!
kp
Excuse my conspiracy theory comment but i believe that when the IRS does not like something that Congress passes, they find ways to delay. I bought 2 properties in Louisiana for the GO Zone 50% upfront depreciation. The IRS 3 years later is still not issuing guidelines about doing a 1031.
Great info! I had heard about the delays - I am going to re-blog this!
This is good information for us to be able to send to our clients. Thanks
Sorry, the government is having a bit of a cash-flow problem since giving billions to the banks, so you'll just have to get it when you get it!
Have not sold a home to a 1st time buyer for a while but this is useful information - I guess we should not be surprised!
Thanks for the story, will send out to my clients. I believe the IRS changed the filing to cut down on fraus
Thanks
Thank you for the information.
Seems like this is getting to be the norm with just about anything that has to do with these new stimulus initiatives.
Thank you for the information. This would seem to be just another way to "touch" last years clients, again providing value added service beyond the closing table.
Thank you for the short cut and info!
My wife & I actually bought our first home in Sept. We decided to amend our 2008 taxes in order to receive the refund the quickest. The government actually gave us interest on the $8000, so the check was for over $8200. I wasn't expecting that!
Thanks for this post! I will be re-blogging it too. I've added the form to my links also.
thanks Leslie for the info, hopefully they'll get their act together soon. They're going to have to as there probably will be another round of credits coming...
Thanks for the info - I will pass this along to my clients right away!
Just more proof that if the government would stay out of the way and out of our business we would all be much better off.
Great article. Better late than never... right?
News of the wait time is discouraging, but some news is better than no news. I'll pass it along to my buyers so they can be prepared. Thanks.
Great information. Thanks for sharing.
It's because initially the IRS didn't require proof of purchase that this is now happening. Now you have to send in HUD 1 statement or something to prove you actually purchased a home. Then, the files are handled by real hands (not just computer scanners). Yes, it takes time. But I'm of the feeling that it's worth it if it prevents rampant fraud.
Thanks for the info - Ill pass it along.
You can thank all of the people who abused the system in the past. Instead of taking your word for it, the IRS is now asking for proof that you purchased a home and that you actually qualify! Nothing like closing a loophole!
Leslie, thanks for the info. Like some of the others I have people asking about this.
I like the post today. Thanks so much for getting it out to us today.
Patricia/Seacoast NH
The IRS you got luvum. Anything to hold the money just a little longer.
Thanks Leslie, great post.
So much fraud on the first go around due to no checks and balances, so now we'll go overboard in the other direction. I had clients getting the prior refund in 3-4 weeks, apparently that's a thing of the past.
Leslie~ Thanks for sharing this with us. I am going to re-blog this too!
Thanks for sharing this information.. People really need to know this when filing for thetax credit.
Thanks for the link to the new form. I'd heard that this was taking quite a while, but didn't realize it was as long as four months!
Leslie, Thanks for the information. I will pass it along to my recent buyers. Terrible to hear that buyers are having to wait 4 months.
Thanks Leslie, I too was not aware of the delay to get the money. I'm e-mailing my client the form now. I just tweeted your blog.
Thanks for sharing and should be a great repost. We are trying to get the word out and this certainly helps.