FED $8,000 First-Time Homebuyer Tax Credit - Using it Fraudulently Can Land You In Trouble!
IRS - TWO DOZEN CRIMINAL INVESTIGATIONS OF TAX FRAUD UNDERWAY RELATING TO THE TAX CREDIT!
Are you a First Time Homebuyer?
You have just under three more months to take advantage of a special $8,000 Income Tax Credit, without repayment, when you purchase your first home. The deadline - a home must be CLOSED by November 30, 2009 in order for you to qualify.
This year, Dean's Team Chicago has helped over a dozen clients who took advantage of the credit - legally! Some unscrupulous tax preparers, however, are pocketing a percentage of each credit, many from unwary clients who aren't even buying home.
In yesterday's Chicago Tribune, Reporter Kenneth R. Harney tells of one case in FL where one tax preparer told clients who weren't even considering purchasing a home this year to file IRS Form 5405 requesting the straight deduction off taxes due, or a refund for the portion of the credit not covering due taxes. For each of 15 clients for which he filed the credit, he would accept a fee of $1,000, according to facts of a settlement agreement.
Actually, there were two versions of the First Time Homebuyer's Tax Credit this year. The first offered a repayable $7,500 credit for houses that closed throughout the second half of last year and into February, 2009. The proceeds of that credit would have to be repaid, without interest, in equal installments over 15 years, or sooner, if the house is sold before that time.
Currently, ending November 30th, the Fed offers an $8,000 First Time Homebuyer's Credit without a repayment requirement.
To qualify for the credit, a new homebuyer must file the appropriate IRS Tax Form, stating the homebuyer has not owned his or her principal residence within the past three years. There are other requirements and restrictions as well -
1. A buyer's Modified Adjusted Gross Income can be no higher than $95,000 for single individuals, $170,000 for married couples filing their income taxes jointly.
2. A buyer is NOT eligible if he or she might be qualified, but a CO-PURCHASING SPOUSE is not.
3. The house claimed could not have been inherited, or a gift.
4. The home being purchased could not have been sold to the purchaser by a relative, by blood or by marriage. This also applies if the buyer purchased the house from a corporation or partnership in which he or she owned a 50% or greater share.
The IRS claims it does not want to discourage homebuyers from filing for the credit. They say they just want to make sure that filers know and follow eligibility rules. The rules are imposed on both tax preparers and individuals, but resulting penalties and interest are always the responsibility of the actual tax payer.
First Time Buyers - move quickly, but do so legally, to receive this valuable First Time Homebuyers Credit. But do so properly, and legally - or face penalties and interest if you are audited!
DEAN MOSS & DEAN'S TEAM CHICAGO
