Homebuyer credit

It is out.

Thanks, sorry I did not finish asking my question.  I needed to know when it might be available to efile.  Right now I am getting a diagnositic that says we have to file on paper.

Paper only per IRS.

lschuck, the federal instructions say it cannot be e-filed.

The reason why it must be paper filed is because there is documentation that must accompany the return.  And, it is taking numerous weeks to get the refund!

The reason why it must be paper filed is because of the rampant fraud in filings for 2008 returns.

Yes, the fraud is the main reason IRS wants the "5405"-type returns to be by paper.  If the only problem were the documentation, IRS could have revamped Form 8453 to accommodate a new checkbox for "documentation for Form 5405."  But they need to take their time to verify the accuracy of the credit for all who apply for it.

It would probably be faster for people to get a refund -- a partial refund -- if they first file (whether by paper or by e-file) as if they never bought a new house, and then after they get their partial refund, do a 1040X for the 5405.

Amy, I have two in house like that right now. As soon as the 1040-X is ready, off they go!(paper wise, that is)

Tax seminar I went to in December cited a preparer who had amended close to 200 returns (virtually his entire client base) to claim the credit... needless to say, he was caught!  And, Amy... good thought on filing the original and coming back and doing a 1040X if the taxpayer is getting and needing the original refund immediately.

A lot of people were asking about this subject, so thanks, moderators, for making this a sticky post up top.

OK, now on this, now I'm wondering if this may be the problem with my client who wound up not getting his refund this year? When he claimed the FTHBC in 2008, Lacerte DID allow me to e-file the return. Did the rules change for 2009? Maybe this is the reason for his holdup, as in 2008 we did not paperfile his return, we e-filed. There was no problem or reject, no diagnositcs from Lacerte that we couldn't do it. Should I have paperfiled the 2008 FTHBC? E-file went smoothly in 2008.

P.S.: Of course you'd THINK the form 1098 (mortgage interest statement) should be sufficient proof that the client bought a home, after YEARS of renting and taking the renters credit. Oh well. I think the people who were fradulently claiming this hurt those who didn't in 2008. Understandable that the IRS is wary.

Yes, IRS issued a directive that after a certain date, you had to paper-file any First Time Home Buyers Credit, whatever year it represented, so you could send in all the documentation and have them take their time about verifying everything.

I'm pretty sure a landlord will get a 1098 for the mortgage interest they pay on the property that they rent out to tenants.  Maybe that landlord used their main home to get the mortgage in the first place, because maybe the deal was cheaper that way.  So it's possible to get a 1098 and yet it has nothing to do with your principal residence, let alone a NEW principal residence when you DIDN'T RECENTLY HAVE an OLD principal residence.  So using 1098's would probably not work for IRS to know who's really a new homeowner.

I'm assuming that since my client's E-FILED return (he filed quite early) was correctly filed at that time, then, since neither Lacerte OR the IRS rejected it at that time? His return, in year 2008, with the FTHBC was accepted by the IRS on 1/17/09. If you'll remember, this is the same client we discussed that has not received his refund for 2009 yet with reference code 1301. I'm thinking they're going to ask for proof of the 2008 FTHBC and that's what's holding up 2009. Weird how the IRS just WILL NOT tell you ANYTHING! You have to "wait for a letter". I bet many people that e-filed their FTHBC before the new rule are experiencing the same issue.

That makes a lot of sense about the 1098, good thought, thank you!

This client was the only one I processed that had the FTHBC, so I did not become aware of any changes on e-filing it in 2008.

In fact, Angel, I think the change was pretty recent.  I think IRS decided to make it paper-filing-only in November or December of '09, after they saw how much fraud there had been for for the first 10 or 11 months of '09.

That's a relief, thank you Amy. I'm wondering, I'm new in this forum. Please remember everyone, when your question is answered by one of these wonderful knowledgeable people, and resolved, send a thank you to the person who helped you! I've scrolled over a few frequent helpers who have answered literally thousands of questions and received very few thank you's. Anyway, just my humble input. THANK YOU EVERYONE!

Further clarification from the IRS on signed documents required...

http://www.irs.gov/newsroom/article/0...

My understanding is that the IRS is requiring a paper filing because you are supposed to submit the closing statement with the return.

Yes, you're supposed to submit a signed closing statement, but besides that, IRS wants to slow down the whole process and avoid e-filing.  After all, if they didn't mind e-filing, you could e-file, and attach the HUD statement to the 8453 (and they would have a spot for it on the 8453).  But they don't want e-filing of this type of return; there was too much fraud last year.

I have a client who is conidered a Long-Time Resident, but he just missed meeting the qualifications by 5 months.  Is there any way to let the IRS calculate the refund like they did several years ago with a check the box feature allowing the IRS to determine whether or not taxpayers received their stimulus checks?  My thoughts are to submit the documentation and then have the IRS approve or reject the credit, and I can't be accused of fraud.