Saturday, April 17, 2010

Home Buyer Tax Credits Spark IRS Audits


If you claimed a home buyer tax credit, don’t be surprised if your friends at the Internal Revenue Service ask for an audit.

The Associated Press reports that National Taxpayer Advocate Nina E. Olson told a congressional committee Thursday that about a fifth of all IRS audits done by mail in the past six months were for people claiming the credit. The audits can mean major delays -- up to five months -- in getting refunds, AP says.

Lawmakers approved an $8,000 credit for first-time buyers last year to help the beleaguered housing market. It was supposed to expire Nov. 30, but Congress extended and expanded the program. Existing homeowners looking to buy new principal residences now are eligible for $6,500.

First-time and repeat buyers must sign sales contracts by April 30 and close by June 30 to be eligible for the credits. And in case you were wondering, don’t expect any more extensions.

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