First Time Home Buyer Refund

[Gail in Virginia]

I had a client come in yesterday who had gotten a letter from the IRS requesting documentation of the home she bought in 2009. We had sent copies of everything with the tax return, and the client called the IRS and told them that but they could not find any record of the documentation. No problem - we faxed the documents to the number we were given.

The part I found surprising, and a little concerning, was that they told the client that even with proper documentation received now, it would be December before they issued the refund. Has anyone else heard this? :mad:

[rfassett]

I have not heard lately any exact times but I know it is taking a very long time for some of them. I did a 2008 amended return for a client to claim the credit and included all of the docs. After resending and/or faxing for the second time, I got the Taxpayer's Advocate Group involved. We did the amended return in early June 2009. Taxpayer received the full credit in June 2010. The girl at the office that is handling the FTHC for the TAG told me that this is far and away their most popular issue - and she did not see things slowing down anytime soon. Tell your client to not plan on buying Christmas presents with that money. But on the other hand, I filed one for a client this filing season, again all docs enclosed, and he had his refund within the normal refund period plus one week. So go figure.

[mcb39]

I also had one where the documents got lost. This was for the first $7500 credit. Client kept getting letters demanding that he repay the $7500. We kept responding with additional copies of documents. Of course, correspondence kept crossing in the mail. After nearly twelve months, he finally received an apology and got to keep the money.

As for other individuals, mostly they have been timely and received within three to four months. Have had all three kinds of FTHBs; some have their money, the most recent amendments are still waiting. Never send original documents and always keep extra copies in case you need them for the second go-around. This has to have been a HUGE issue.

[GeneInAlabama]

You guys are scaring me. I just got my first one to do. I was hoping that I would escape doing one.

[mcb39]

You guys are scaring me. I just got my first one to do. I was hoping that I would escape doing one.

Don't be scared. Just send all required documentation and send it certified. Preach patience to your client and go for it. It is all worth while when you get the happy call that they have received the check, from the happy client. They seem to feel that you performed some sort of miracle. Our job is our job.

[jainen]

>>The part I found surprising, and a little concerning<<

Like all government agencies at all levels, the Internal Revenue Service has been severely restrained by budget cuts in the face of increased service mandates. In my opinion, it is unreasonable to expect big tax breaks AND high performance standards from government, but that is the political climate of the day.

[Gail in Virginia]

I am not expecting high performance from the IRS in regard to this particular issue. When it became impossible to file these forms electronically, they obviously were not going to get refunds within 10 days. When word came down that they were examining everyone individually, I began telling people to not look for their refunds for three months minimum (not that they remember I told them that, but I did.) I don't find that unreasonable for an item that has such a huge potential for fraud. However, when they are looking at a specific return in June, get all the paperwork they request by the end of June, I think that six months additional time indicates that these refunds are going to take a very long time, and I personally was hoping this would all be over with soon.

[JohnH]

>>The part I found surprising, and a little concerning<<

Like all government agencies at all levels, the Internal Revenue Service has been severely restrained by budget cuts in the face of increased service mandates. In my opinion, it is unreasonable to expect big tax breaks AND high performance standards from government, but that is the political climate of the day.

-> high performance standards from government <-

I don't think I've ever had that sort of expectation under any circumstances, regardless of the political climate or which jersey those in charge happen to be wearing.

[jainen]

>>I don't think I've ever had that sort of expectation under any circumstances<<

Then why were you surprised that it takes six months to process a claim for refund? Did you not expect the government would be more efficient? Why were you concerned? Did you not expect the government would be more efficient?

[JohnH]

I'm not surprised it takes them six months to file a claim for refund. As I said, I've never had any expectation that the government would be efficient at anything.

The most efficient government agency by far is the military.

I served 4 years in that agency, so all my life I've been well aware of what passes for efficiency in government.

[mcb39]

This has been a HUGE credit, with HUGE potential for fraud, which turned out to be the case. Unfortunately, everyone suffers, but this is money they never had in the first place; nor is the purchase of the home contingent on the receipt of the money. I had clients who swore they would use the money to pay off credit cards or other high interest bills.; some did, more didn't and bought big screen TVs and other luxury items. So........even the most correct and deserving were not always wise. Nobody is perfect and that includes taxpayers as well as IRS workers. It is our duty to bring it all together in the best and most complete way possible. Be patient and get on with life. If you properly qualify for the credit, you will get it. I was amazed at how quickly some of them came through. And, of course, some clients are still waiting and I will do whatever I can to assist them; even if it means sending the documents three times. Seeing a letter of apology from the IRS is one big Hurrah!