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I received a notice in the mail this week that my tax refund had been amended to omit the $8000 I was due for purchasing a new home in June. The reason stated on the notice was that I already owned a home.
Before buying the house, I made certain that I was eligible for the credit. My agent, lender and tax professionals all confirmed what I had read online - that owning a home does not make one ineligible for the credit unless that home is the principal residence.
I owned 3 properties prior to purchasing my new home. Two are vacant lots and the other is my father's home. I have never lived there, but we have the same name.
I called the IRS after receiving this notice and gave them this information. They informed me that I would need to state my case in a letter and mail it to them, and that they'd tell me in 6-8 weeks whether they agree or disagree with me.
Most shocking to me was when the representative told me that the IRS was automatically denying the credit to anyone who owned property. Basically, she said that everyone who already owned property and claimed the credit was deemed ineligible and would need to argue their case by mail in order to get the credit. They're making no effort to determine whether the property each taxpayer owned previously was that person's principal residence.
So, what are my chances?
I stated my case in a letter and mailed it to the IRS. Are they going to respond 8 weeks from now that I'm still ineligible? I was really counting on this money. If they knew that they were going to deny every taxpayer who owned ANY land previously, then why didn't they ask us to include explanations with our tax returns decribing the nature of that other real estate?
You can probably thank all of the abuse that happened before for this. I remember reading there was a lot of fraud in the beginning when the credit came out.
They're probably doing it because we're broke and they don't have money to be giving out and by denying everyone, there is going to be a significant percentage of people who do not fight for their credit. Hence, the country will save money...
I'd not have minded if they had informed me before filing that they would need the additional information if I planned to claim the credit. But now I have waited months to receive my partial refund, and will need to wait another 2 months to hear from them whether they need even more information from me. So, even if they agree that I'm due the credit, it's not inconceivable that I might not get the money 8 months or more after filing my taxes. Honeslty, I almost feel as if I should expect payment with interest at that point.
Location: Mokelumne Hill, CA & El Pescadero, BCS MX.
6,957 posts, read 22,307,357 times
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I'm guessing that the speed at which the credit was enacted is largely responsible for the hang up. Bureaucrats have to try and figure things out after a law is passed and their default position is what they've handed the OP. They're probably just trying to reduce the level of fraud that some might try to perpetrate. Given that they're also giving out a $5600 credit to "move-up" buyers, I would think that they would give you the $5600 and then question the difference, but i guess that would be too easy.
I've wondered how they would know about whether one owned a property before or not.
I've wondered how they would know about whether one owned a property before or not.
Mortgage interest deductions would probably be the first place they look.
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