South Loop Scoop
Interesting how many first -time buyers who received the tax credit first, will have to pay back the money! If they did not understand how the program worked, they may be out of luck! CNN reported that nearly half of all Americans who claimed the tax credit on their 2009 tax returns will need to pay it back! The inspector General for Tax Administration said that about 950,000 of the 1.8 million American’s who claimed it on tax return, will have to repay the government.
Basically, there were two different programs, buyers who purchased during 2008 were to deduct, dollar for dollar, up to 10% of the home’s purchase price or $7,500, whichever was less. But the typical government program downside was, the money was a no-interest loan that had to be repaid within 15 years. Buyer who decided to wait until 2009 were in a much better position, receiving up to $8000 without a repayment clause.
The additional issue, during a review by the Inspector General, found that the IRS could not easily distinguish between home purchases made in 2008 and 2009. That added to concerns that some claims could be erroneous or even fraudulent, and that buyers could possibly claim their purchase came later than it actually did.
Thursday’s release reported that 73,000 claims, more than 4% of the 1.8 million homebuyers who received the credit, had incorrect purchase dates recorded by the IRS. Some of the inaccuracies counted against the taxpayers and almost 60,000 were listed as purchasing in 2008 (meaning they had to repay the credit) or had no purchase dates at all, rather than their correct 2009 purchase dates, which would free them of the obligation to pay it back.
The inspector general reported that 1,326 single people listed as dead by the Social Security Administration claimed more than $10 million in credits. The IRS threw out 528 of those 1,326 claims, saving $4 million.
Bottomline, buyers will be running to call their accountants to make sure they on not on the hook for a repayment, down the road. If you are unsure, it would be best to do the same.
