first time home buyer credit still and again

[grandmabee]

I have seen some post here and other forums where preparers are sending in a copy of the closing statement with the amended return. I see nowhere where they even ask for it. But after doing the 1040x and 5405 I can see where they may be fraud involved. it sure doesn't ask for much detail. I have always used the "don't send what not required" I always feel the people who open the returns don't know what the extra paperwork is anyway and it gets tossed.

I think I'll just wait and see if they ask for more information

Anyone else have thoughts on this

[JohnH]

I never send in anything not required.

First of all, it probably gets thrown away or ignored if the client is lucky.

If the client is unlucky, it catches somebody's attention and they wind up doing something special with it. That "something" might be laying it aside to review later when they aren't as busy, which would at least delay the refund. Or they might also pass it along for a higher-up to look at it. ("H-m-m, wonder why this attachment is here?")

I prefer to make it as easy as possible for the processor to put the info into the computer and move on to the next return. If IRS has any questions, they have the client's mailing address. All they have to do is go through the process to open a file, add it to their inventory, and send an inquiry

[mcb39]

And that is exactly what they will do. If they want a copy of the closing papers, etc. ; they will ask for them.

[JohnH]

An additional thought on this...

I think they SHOULD be requiiring copies of the HUD-1 closing statement on all returns claiming this credit. It might help cut down on the fraud and abuse.

But in the very unlikely event that I prepare an original or amended return claiming the FTHB credit, I'm not attaching anything. If it isn't required, it will be in my files but it won't be attached to the return.

[mcb39]

An additional thought on this...

I think they SHOULD be requiiring copies of the HUD-1 closing statement on all returns claiming this credit. It might help cut down on the fraud and abuse.

But in the very unlikely event that I prepare an original or amended return claiming the FTHB credit, I'm not attaching anything. If it isn't required, it will be in my files but it won't be attached to the return.

I agree with you, John. I did prepare and file three claims for the credit in 2008; only had one questioned so far. I have already had numerous calls and questions regarding the 2009 credit. Of course, everyone wants to amend and get the money ASAP. Many of them are looking for a workaround to the 3 year non-ownership requirement. I will NOT be a party to any of that. I will only file them if I absolutely know that they qualify. It is more work now and more work down the road if and when the IRS requests to see the paperwork.

[David1980]

The way I see it, some would choose to attach the form in the same way they would choose to attach supporting documentation for a dependent that multiple people claim every year. If they know the information is going to be requested anyway, why not?

That said, I don't see any reason to attach the HUD. If they know it's going to be questioned I'd be suspicious of whether they qualify & otherwise the IRS can request it if they want it during an audit of the FTHBC. I do agree that it probably should be required, because that would eliminate a lot of the fraud. I do require the taxpayer bring in the HUD-1 in order to complete a 1040-X for the FTHBC. It just gives me extra confidence I'm not doing work for fraudsters & the information will be necessary for the next tax return anyway (property taxes allocated to buyer and all that.)