Saturday, May 22, 2010

Getting A Homebuyer Tax-Credit Through The IRS Can Be Taxing

The homebuyer credit has the IRS busy processing over 1.8 million claims for the credit. As this article from the Wall Street Journal explains, $12.6 billion has already been given out to taxpayers. Check out a snippet of their article on the story below.

Let's get this processing volume into perspective. IRS started processing claims for the first-time home-buyer credit when taxpayers started filing their 2008 tax returns in early 2009. That means IRS employees have processed about 150,000 claims a month.

It's a monumental task. Since discovering millions of dollars of fraudulent claims, the IRS has been reviewing a substantial portion of the claims instead of letting the computer process and pay.

That's where the delays start.

Steve B. said he feels he's being lied to about his tax-credit claim. He filed for his home-buyer credit in January, certain that everything the IRS requested was attached. It's now been more than four months and the IRS simply tells him "it is in the errors department" and they have no further information. Steve has tried calling the IRS "a million times," he said. He's even tried the Taxpayers Advocate Service, but they tell him they don't deal with this issue.

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