March 2010

Claiming and Documenting the First-Time Homebuyer Credit

From Journal of Accountancy.

Practitioners should be aware of increased documentation procedures for the first-time homebuyer credit and the new administrative powers available to the IRS if a client’s return is selected for review. In addition, required attachments necessitate filing a paper return for 2009 (see news release IR 2009-108).

This credit under IRC § 36 has been a popular incentive. Interim IRS statistics indicate more than 1.7 million returns claiming the 2008 and 2009 credits were filed through Nov. 21, 2009, with a total amount claimed of about $12 billion.

Its attractiveness also made it ripe for widespread abuse. Statistics from the Treasury Inspector General for Tax Administration and the IRS Criminal Investigation Division indicate erroneous or fraudulent claims were submitted in significant numbers.

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This publication is part of Blackman Kallick’s marketing of professional services, and is not written tax advice directed at the specific facts and circumstances of any person and/or entity. Contents of this publication are of a general nature, and you should not act on this information without obtaining professional advice from your business advisor that is appropriately tailored to your individual needs and circumstances. This written advice is not intended or written to be used, and cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.