Over the past year we’ve talked quite a bit the home-buyer tax credits that were available to both first time home-buyers, and more recently to existing homeowners looking to buy a new primary residence. The bill was originally passed in February 2009 as a part of the Obama stimulus package, and was extended at the end of last year to be available to home-buyers on homes purchased by 4/30/2010. First time home-buyers had a $8,000 tax credit available to them, and current homeowners were able to claim a $6500 tax credit. Both credits are refundable credits – in other words, if your tax liability was already 100% covered, you would get the money back in a check from the IRS.
There was a flurry of activity at the end of April as home-buyers scrambled to get in on the credit before the deadline passed on 4/30. My brother and his wife were one of those couples jumping in on the deal before it was too late. As a result home sales jumped in April 2010 jumped a whopping 14.8%.
So now that everyone has claimed their credit, they still have to claim their credit on their taxes in order to receive the money. Apparently that’s where things get a bit trickier for many.
Homebuyer Tax Credits Denied Or Delayed For Many
According to IRS data through February there were over 1.8 million claims for home-buyer tax credits . About $12.6 billion has been pumped back into the economy as taxpayer refunds, according to Bruce Friedland, an IRS spokesman.
Let’s take a step back for a minute, and talk about just how many claims that is, and what it means for people waiting for their check. From Market Watch:
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 per 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.
The IRS has been deluged by claims (for the $8000, $6500 and $7500 tax credits), many of which have been found to be fraudulent or not complete. The result is that even some taxpayers who have filed their claims correctly, are being caught up in avalanche and are receiving slow response time.
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 over four months and 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.
Steve isn’t alone. Delays seem to run 25 weeks and more.
Some of the reasons that people are being denied? (Both legitimate and not)
- Fraudulent Claims are being made. There are some legitimately fraudulent claims being made by people who are looking to just get some extra money. Because of many of those the system is slowing down and claims being examined more closely.
- IRS is rejecting claims from people who have ITINs, the Individual Taxpayer Identification Numbers issued to aliens who do not qualify for real Social Security numbers. The reason? There’s no credit for non-resident aliens. One proviso, however – if you’re a resident alien, you may still be eligible. Ask the IRS to re-examine your claim.
- IRS is rejecting claims from people who have listed an apartment number as the credit isn’t available to apartment dwellers. The problem? Condos, duplexes, boat slips (which are eligible) and other things have numbers too. If you’ve been rejected, re-file with proof showing it isn’t an apartment.
- No proof of purchase included with filing. If you didn’t include all the documentation required to claim the home-buyer tax credit, you may get denied. Refile with the correct documentation.
- IRS errors are being made because of large volume. Some home-buyers are finding that their claims are being denied despite being filed correctly, simply because the IRS is overwhelmed with tax credit requests, and errors are being made.
Hurry Up And Wait For Your Tax Credit
So if you’ve bought a home, filed for the tax credit and are now awaiting your big fat check, don’t be surprised if it takes a while. Hopefully you weren’t depending upon that check arriving anytime soon.
If you’re still waiting for a home-buyer tax-credit refund, you may be in for a long wait. Call the IRS every week or two until you’re sure someone has received your file. (Some have been getting lost.) Once you know they have your file, make sure they have the correct address for correspondence. In fact, consider sending in a Form 8822, change of address, just to ensure it’s in the system. When you get any correspondence, other than a check, respond to it immediately.
So if you’re waiting for your tax credit, stay on top of the IRS, call them frequently and be sure to respond to any correspondence immediately. And good luck!
Have you filed for the home-buyer tax credit? If so, have you received it yet? Have you run into problems. What do you think of the credit and the IRS’s handling of it? Tell us your thoughts in the comments!
Lakita | Personal Finance Journey says
I closed on my home yesterday and I plan on filing by the end of the week. I’ll certainly stay on top of things…thanks for the heads up!
Peter Anderson says
Congrats on your new home, and I hope your credit comes faster than it has for some people!
Deacon Bradley says
Lakita, congrats on the new home!
I purchased my first home last October and filed the paper work in November. So far I’ve received zero dollars, but quite a few letters from the IRS telling me they either don’t believe I bought a house or that they’ll tell me next month if they believe me. That’s over 6 months for something that could not be any more clear. I’m just thankful I wasn’t counting on that cash or I’d be up a creek!
ps, anyone still think government run _______ (fill in the blank) is a good idea?
Peter Anderson says
haha.. you are so right. the government is becoming so bloated and unmanageable, I don’t trust them to run much of anything! just look at anything they DO run – bloated, wasteful and spending on a deficit!
Lakita | Personal Finance Journey says
Thx Deacon (and Peter)!
That stinks about all you’re going through. I hope they certainly straighten it out. It would never be an idea to “count” on the money. But at the same time, I hope we get what is promised to us.
My husband and I have also run into the same problem. We bought our FIRST home in November, filed and sent off the necessary documents for the credit in March, and we were denied. They claimed to have denied us because my husband paid realtor taxes on 60% of land that was given to him as a birthday gift when he was in high school. There is no house on the land and he never had any intentions of residing on that land. We had to appeal and they keep telling us that they are doing more research and will get back to us in 60 days, 45 days, etc. I called them after the 45 days were up, and they told us that the case was closed and no amendment had been made. This sucks! We now have to do another appeal.
I am going through the exact same thing. I paid real esate taxes on raw land also and I was denied. I sent them all of the correct paperwork and I also sent them the documentation showing them that there was no house on the land. The IRS employees have stolen so much money and approved so many fraudelent claims that they just do not want to deal with all of the claims where they have to verify information. They are just denying the claims instead of doing their jobs.
avery james says
I bought a home in dec 09. Filed on feb 03 2010. delay and more delays from the irs. Now I am with an advocate and still no date of when processing will occur.No explanation as to why the delay. Irs reps are very rude,.No answers, i was counting the on the money. now i’m late on the mortgage, car is broke, riding a bike to work. this delay has crippled me.
Peter Anderson says
Sorry to hear about your situation. Just another reason not to trust the government I guess. You delay on your tax payments, they’ll throw you in jail. They delay and you have no recourse. Sorry Avery.
Susan Keeley says
Bought my first home in April 2010– Now waiting on my BIG FAT CHECK..Called IRS TODAY and the lady was kind and helpful, she stated that I was not in the system yet (amended return w/all documentation) takes about 6 weeks and for me not to look for my check for at least 12-16 weeks…Oh well, still enjoying my new home!!…
Lyla Turner says
My father bought a home on my street in march. I did most of his paper work. He qualified for the 6500 credit. I sent all the correct amendment papers the day after closing to the IRS. It’s been 8 weeks and today I received notice that it was denied. Why? Because he sold a piece of property 2 years ago and claimed about a 8000 profit. It was a commercial lot that was in our family for 25 years and he paid taxes that year on what he made from it which was not a huge amount of money. I have never heard that this could be a reason to get turned down. He is not a rich man. Very limited income with some investments that have taken a beating. Gets by mostly on social security. What the hell?
I filed for my credit at the end of September of 2009 and still no response!! LOL What can you do but wait and call them once a week or every other week to receive the same response: Has not been reviewed yet….
We were entitled to the $8,000.00. Filed all the correct paper work with the filing. and then after 4 months we check the IRS web site and it said there was a problem and we should call the IRS. We called and were told we did not file our 2005 tax return, My wife is a CPA , made an appiontment to see them and give them a copy of the 2005 return. When she gave him the copy of the 05 return he said we also did not file 2006. We recieved a refund for both 05 and 06. So now she has to send a copy of the 06 return and all he will say is they will review it. This sounds very strange that the IRS can not find these returns. Without the returns he said our refund will be only $2,400.00. Almost seems like an effort for the government to keep as much of the 8k as possible?
Is anyone else having similar probs?
We filed for the 6500 with our taxes and sent them in Feb. This week we received a letter saying they denied us because we previously owned a home. Duh!!!! That’s why we didn’t file for 8000. We sent mortgage interest proof for 5 years. We lived in the house 30years. Our tax man is working on it now. Frustrating.
RG Scott says
This is very,very frustrating. I researched and absolutely made sure I qualified before I applied for the $6500 credit. I was denied, and I will be calling the IRS. I think this is worthy of national media coverage. From what I hear, there are a lot of people qualifying(and depending on) for these tax credits that are being denied. What a sham, I have never obtained anything from the government, and the one time I qualify and need it, I get the door slamed in my face. Can’t wait to see what healthcare will be like…God help us!
I bought my house dec 31, 2009 and subsequently sent in my paperwork to the IRS april 11 th. THey told me things would get processed by by june 2nd. June 2nd I was told that THey needed a copy of the purchase agreement, a paper I know I sent the first time. I followed up jully 2nd and they told me that My paperwork was being examined by a special commitee. Jully 23rd another call yielded that the commitee had moved into processing and that things shopuld take 6-12 weeks. I just called today and Now My paperwork is back before the commitee . I love people that complain about being broke and not having this money because it’s me. THey owe me over 10k at this point and I can’t even get my base return. Car needs repair, house needs repair, I am paying off one creditor with the next. I hope that at some point people get their just deserts. I had money, I was responsible. My own governement pulled me into this situation and now they seek to reevaluate my paperwork. He’re the kicker they tell you after 45 days that you get interest. What they forget to mention is that if they send you a letter asking for anything, maybe they want your birth certificate to confirm age, well that 45 day counter resets.
We finished building a house in march 2010 in a county that does not have any building codes, therefore an occupancy permit is not required. However the IRS keeps telling me that I have to submit one for the credit. after dozens of calls and 6 months after I first filed, they gave me a long list of documents that they would accept in place of the occ. permit. Now I have to mail the documents in a wait another 6-12 weeks. Go Government!
I filed an amended return to get the first time homebuyer tax credit in mid april along with ALL of the required documents. however in july received a notice from the irs stating that the 1 form needed for the homebuyer tax credit wasn’t included….go figure. the form was included with the original paperwork however i sent it again anyway on july 9th. you would think that we could send it to a separate address for faster processing considering there was just a missing form (that they lost) and we had already waited over 10 weeks. but that would be too much to ask. there was no self addressed envelope or directions for resending it so we had to wait on hold for 45 min for the address to send and amendment to an amended return. well…..after another 4 weeks i just recieved certified mail today stating that they have denied our claim because we have previously filed real estate taxes. the home that i purchased over 3 years ago was never a primary residence. therefore we still qualify! i’m considering filing an appeal but it will probably be tax time next year before we see a penny of it!!
disgruntled tax payer!!!!!
Peter Anderson says
Sorry for your experience. Get ready for more of the same with the health care program that was just passed!
Jody G. says
We bought our home in March ’09. I filed our taxes on time, Feb. ’10.
Got no where with the online help- got a letter stating they needed more info- a duplicate HUD statement. Finally, after contacting the 3 congressmen in VT, ( no help there either) saw online that a PARTIAL refund would be deposited Aug. 6, 2010 ( it was for the amount of income tax we over paid, minus the $8000. tax credit) 6 MONTHS LATER! The irs said a letter would follow on Aug. 16, to explain why only a partial refund was sent- (the letter stated they would need more time, and if i had ?’s to call.) I did- I was told it would be another 12 weeks, but i would get the credit- On aug. 20, ( 4 days later) I go another letter, saying we had been denied the credit, and to call another number to get details-
Tomorrow,( monday) i will spend another hour on hold waiting for a lame excuse. wonder what they will say this time…
We built our home, turned into a mortgage in February, filed and still no money. It is September 1. They told my husband today thaat our claim was “denied” but gave us the phone number to the advocate. We counted on that money to be here a very long time ago. :( I am considering talking to my Representative…
We filed our credit in May and are still waiting due to the ownership of a piece of raw land. First we were denied, so we started the appeals process in June. We just keep getting the run around and have now been told we are out of appeals because our file is incomplete. However they have not told us what we need to make it complete. Who knows! All I know is that we are pretty angry at this point. The tax credit was a huge incentive to buying our first home.
We bought our home on April 20th and sent out the rebate application the next day. After 16 weeks passed I called and was told that it was received but nothing other than that. I called again at 20 weeks and was told it was denied and a letter was mailed out. It’s been almost a month and still no letter. I called twice since the 20 week point. The first time was to find out why I was denied… they said because my wife (married for 3.5 years) didn’t live in my previous home for five years. Duh… she’s only been in the country for 3.5 years. Can you say marriage penalty? I called again today to see if they can resend the denial letter… they said if I want to get my denial letter to resend the application to start the whole process over… so I can get denied again and then the letter would be sent out a second time. I feel totally scammed and have lost total confidence in our entire system. My wife and I have discussed it and have decided that after she finishes college we are moving to another country… most likely Canada. The U.S. is in decline and is being destroyed by greed.
mary ann says
I’ve been in my new home almost one year…I filed for the tax credit last year..they, IRS received it February…my CPA who filed my return apparently grew discouraged and turned me over to a tax advocate in Georgia…. which is where my claim has been since June……I have been in contact several times with the advocate and sent requested documentation and have been told now I may hear something by Nov. 22…….
Wow! I thank GOD that I found this website! I have been so frustrated. We bought a house last August, filed for the credit in April and were denied because property taxes showed up on our previous return. My husbands name was put on his fathers property 6 or 7 yrs. ago as part of elder estate planning and his father has life use, he IS still alive! It is not our primary residence nor will it ever be. When I called the IRS, the gentleman said it was “a complicated situation” I told him “either you live somewhere or you don’t, its not complicated” We have gotten 2 letters asking for 45 more days, that was after the denial. I asked if I needed to send additional info and was told no. I will not let this go!
Cindy Brant says
If you are having problems collecting your money from the IRS…..CONTACT your STATE REPRESENTATIVE!!! If enough people complain to Congress maybe they will take action!!! Stand up for yourself…DO NOT let the IRS bully you into accepting their incompetence!!
Paul S says
I bought my home in October of 2009, three years , and a few months after I had sold my last property. I should get the 8000, right? Well, here we are in Dec 2010, and Im still waiting. They sent me a letter for more info which i provided, and than a few months after that they said because I had Mortgage interest in 2006 i was not eligible for the tax credit. The problem is that I did pay mortgage interest in 2006 up till July then sold my house. So, from july 2006 to Oct 2009 is over three years. Why can’t I get it? Now, Ive sent them Hud 1’s from both my selling closings in july of 06, and also, my buying closing from oct 09. Is there anything else I should send???? Help?????
I am in the SAME boat as you! We sold Aug 31st 2006 and bought again in Oct 1st 2009, 3 years 1 month. They say that I paid mortgage interest, as stated on my taxes. Well, I did! I paid for 8 months in 2006 and I paid for 3 months in 2009……I think they want people to just give up the fight! I am on my 4th time submitting paperwork!
My son bought a house last october he filed his return and was sent his money. Then in november he received a letter saying he was being fined 1100.00 plus 186.00 in interest because he did not send the closing statement in with his return. He was given the choice to send in the paperwork(mortgage documents, electric bills, closing statement, title, deed, gas bills etc.) or admit guilt basically and pay them almost 7000.00 (the credit plus fees). He sent the paperwork in and is waiting on a response. He did nothing wrong is low income and using the tax credit to pay his taxes and insurance until he completes his degree. I believe he is being bullied and he qualified for the credit. Wondering now if the fact that we loaned him the money without interest is going to play into this. We did not give him the money just loaned it to him with an agreement of a lump sum payment needed to be made to us in ten years, we figure he can start paying us back slowly after he gets his degree. Reading things online now I am wondering if we may have problems with the fact that we loaned him the money without interest. What a frustrating time. The house was a great price so he could not pass it up. but he needs the credit to survive for the next year. Guess we will see what kind of lame excuse they give now that we sent all the proof possible.
Well my wife and i bought a house in february 2010 i ameneded my taxes at the end of that month sending all correct paperwork 3 months later they sent me a letter denying our claim because i had claimed interest on our camper and since it is self contained it was considered a home! I ameneded my taxes to adjust and paid back the interest that i had claimed now they say that it is still under consideration.Its been a year and still no $. Its tax time agian and i don’t know weather i should re claim it and try agian or just keep waiting?
Rick stay on top of it besides the land i also had a rv mortage.One year to date as stated on my other comment i see $ on the way
Rick also has your paper work been sent to Brookhaven Appeals you should have a case worker if it has .
I filed for our first time home buyer rebate Jan 2010….I have yet to receive it! I have been denied 3 times because they say that I paid mortgage interest (which to them proves that I had a mortgage w/in the 3 years) on my taxes. Well we owned a home until Aug 2006 and then bought in Oct 2009, we did not own a home for 3 years and 1 month. There is some form of ‘glitch’ and I don’t know what to do. The IRS rep told me to send it in AGAIN and re-word my cover sheet….this is ridiculous!
Lesa Jerkins says
I filed my taxes last year, and I still have no refund. I called a tax lawyer; he said, “you just have to hope and wait.” I am still praying for I know that GOD is in control and when I need it the most I believe it will come. So everyone keep the faith and believe. Your sister in christ, Lesa M. Jerkins
I filed for first time home buyers back in april 2010 The land i was putting the home on had a mortage they thought the land was a home morgage.After not giving finally on March 29 one year to date i get an approvel but it still has to go to one more supervisor but i was told she was very confident of final approvel
We rented this house, the owner put is on the market, so we purchased it April 2010 (our first home purchase). Been waiting 10 months for the Credit. Been going back and forth with letters from IRS and us sending documents to prove we rented then purchased (why isn’t the purchase agreegment enough???!!!)
April 1 i was approved after one year for my first time home buyers. five days later i was denined because my RV is a mobile home.I have never seen a fifth wheel hitch on a mobile home.I know i have a mortage on my fifth wheel which i use for out of town work. When i was in town i was helping my 70 year old mom by paying rent and staying with her.Now i have a Modular home on my there lots.Which is my first home ever.O well perhaps since i am unemployed construction worker their is hardly work on the road or anywhere. I will put tie down on my RV and skirting an a add in the paper mobile home for rent.Perhaps the irs could manufacture Mobile Homes with fifth wheel hitches and sell them to pay down the deficit.We will call them RVmoveies
PS their looking for any reson to denied. Next reason you purchase a tent and stay a week end on your property that will be homesteading with your tent Denied
PS IRS DOes NOT Believe in God. Oh i bought Furniture with my Credit which i new better oh well i will have to pay it back on my own at 29% or something like that
Krystal the mad tax waiter says
Filed January 16, 2011. Accepted February 16, 2011. Got a “supposed” date of by 03/01/2011…Never happened. Went to 1301 on 03/02/2011. Stayed that way until 04/07/2011. Got a “supposed” date of by 04/19/2011. Well by 04/11/2011, I was back to a code…1481….Since then, the IRS has lied about when the refunds are to come out…..again. Some say by the end of April 2011 but other people waiting are getting May 2011 “supposed” refund dates. I think this is a big mess and the IRS should have applied safe-guards to getting the credit in the first place so this would not be an issue. For an entity of the American government, it sheds an incompetent light on the IRS! I am so mad and disappointed that I am at a loss for words. I have become a stalker of the WMR site and all I can dwell on is not having my $ to take care of my family. I am a single parent of 4 who really depends on tax time to make it throughout the whole year. This is a mess and it seems that the Incompetent Revenue Service has no solution for people in my situation. I am HOH paying back more than $500…it would seem that I would be priority over some but I guess that’s just my luck…For the next years $500 is all they are getting!
Lucid REM says
We filed for the $7500 credit issued for homes purchased in 2008. We were approved. We received the funds and now filing the tax return for 2010 we are required to repay the first payment. Instead we are being told we are now denied and owe over $8000 (interest added to an interest-free loan) to the government because our home was purchased from a relative. They really know how to hit you when you’re down. So not only can we not count on funds we need from our return but we also owe monies that will guarantee us not receiving a tax return for years to come unless payment is made in full. As a side note, I filed our return in January and it has taken them three (3) months to give us the bad news all the while leading us to believe funds were on the way for monies owed to us.
Teonie D says
I been going threw this IRS for an year,since march2010-present,the same old b-,i went threw,wait,tax person,losing my paperwork,to lies,I went to the tax office here in st.louis,she amended another form,that was sent last year,i was told that,once again,i am in title to this 8000,i was told not to keep calling them,told to wait until july,it will be something else,which,i hope not,but i keep fighting and just pray on it to god! we will see,so for i haven’t saw an dam letter! am very tired of the s****!!!
The IRS is putting me and my family through, I just hate that they were so quick to give the money to undeserving people who took advantage of the money they were’nt suppose to get, and now Making the rightful owners of this money go through so much of a hassel to get it !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Dave E says
We are frustrated too, and remain waiting for the $6500 to arrive. We filed in early March, and did the follow-up request in April. It is now July…. and we are still waiting. BAH!
Joe H says
I filed a 1040x to claim my credit back in Jan 2011. I was denied on the basis of having previously claimed Mortgage interest back in 2003-05 which was the last home I had. I sold and decided to rent when things were at the insane high levels from 2005-2009. Finally got back into a home in 2010. I appealed and from Jan 2011 to 8-31-2011 I was chasing the appeal through the process. I just found out I was approved by the case worker! BUT… now it needs to be approved by appeals manager and sent back into the IRS system to be credited to “my account” then paid. Estimated time of delivery 6-10 weeks! Might see it by November! 10 months in the vortex. Worn out but feel justified. Hang on everyone.
I have worked 90 hour weeks, tried to balance that with spending time with my new family. Worked to build a life for myself and tried to follow the American dream. I have given my faith in the fact that working hard is something rewarded. I have struggled for almost 4 years now to build a business, hire, and buy a house. As the economy crashes around me, I have been making it… until this month.
My Wife and 2 little boys and I bought a house last year, with a very reasonable mortgage. Even with this year being the hardest we’ve had, I’ve managed to make all my payments on the home and bills. When we bought our house, we qualified for the First time home buyers credit of $8000. We filed our return and it was denied- money we were counting on. I have an accountant, and he has worked with us to advocate to get our legitimate return filed. The bank, Real estate agency and accountant all agree that all paperwork is in order, and there is absolutely NO reason that it should be denied. We resent the forms, along with a letter from our accountant expressing all was in order, and waited. 6 weeks later we received a letter that the return is denied and we must pay almost $8000 in tax- no explanation why. The only thing we can do is file a claim in tax court an prey that all will be OK. I understand that there has been lots of fraud with this credit, and appreciate the IRS’s Prudence in preventing further fraud. However I am being forced to pay the thousands I “owe” up front, which will put me out of business. Without my business I will loose my house. I have done nothing wrong, but am facing a nightmare.
Is this my reward for hard work? is this why I spent all those long nights working until my eyes crossed and came home to an asleep family? to loose my home and business to clerical oversight? This is just wrong. Can we not trust in our government to give us what is owed without going to court to argue about it? either way I will be facing bankruptcy now. What can be done? Nothing?
My husband and I filed for the home buyers tax credit for 2009. We now have to return $6500 plus interest because of the marriage penalty. We married in 2008. Because we qualified for different reasons we were denied. Had we waited 5 months to marry we would both have qualified as single filers. Evidently, a bill was created to correct the marriage penalty but never made it to the house floor. No fair but the IRS wins.
Charles Wythe says
The IRS declined to pay a first time home buyer tax credit on a house i purchased from and owned by my ex-wife. They made up the reason that it was imputed I owned the house because I lived in it. I went through the appeals process decided by IRS employees which was denied. Then contacted New York State Senators, one photo op Chuck whose 15 year intern said they couldn’t help. Finally got the other to at least get the paperwork returned. Typical politicians that don’t do anything. Hiring a lawyer is too high a cost so the IRS has you by the balls, and as a taxpayer I lose. Lawyers and the IRS are below pond scum.