First Time Homebuyer Headache

[mcb39]

The same client that I had checked in May because he took the credit for 2007 has now received a 4549 Income Tax Examination Change, demanding that he pay the money back before August 31. He sold property in 2007; which was vacant property. He had intended to build on it, but his brother wanted it and because he was getting married, he sold the vacant land and bought a house. We faxed them pages and pages of proof in May. Today, I called him to set up an appt to make the call from my office so that the Examiner would talk to me and we could fax whatever else would satisfy them that he DID qualify. Guess what! Today he gets a letter of apology stating that they neglected to examine the paperwork we had presented in May and were very sorry for the inconvenience, but he should not take any action until he hears from them again. We are still going to call them next Tuesday just to check on the status. BUT, how can they be so careless, inconsiderate and downright negligent? This isn't even the free credit, this is the one that has to be paid back and there is absolutely no doubt that he qualifies. Any of you who have done any of these, be prepared for possible chaos.

Have a call right now on my machine asking when I can amend a return for a girl who just purchased a house this month and has moved in. I don't even want to call her back. She is getting married in Sept and I imagine she thinks that she will get the magic $8000 in a few weeks and I will have to tell her that amendments are not filed electronically. I would rather not even get involved, but she is a relative. Happy taxing to all! :dunno:

[kcjenkins]

Well, even tho it's got to be paper filed, it should be processed fairly rapidly as it deals with only one item. Provide the proof with the 1040X, and warn her to expect the money around Christmas. That way, if she gets it faster, she will be happy, but if it takes that long, she will be prepared, and not calling you about it every other week. :D