The Real Estate Bloggers

IRS 2008 Homebuyer Tax Credit Causes Problems For Taxpayers

Posted: 20 May 2011 09:58 AM PDT

Suburbia The law of unintended consequences is affecting thousands of taxpayers who took advantage of the 2008 First Time Homebuyer Tax Credit. The credit, really more of a loan, has created problems in the software used to process returns. Those that filed and are due a refund have been delayed for months from getting their money back.

So much for helping young families experience the joy of home ownership!

And there is no end in sight. The IRS is saying they are working hard to get the money to the taxpayers but in reality those that are owed money are just being given the runaround.

All the taxpayers involved in the glitch took advantage of a one-time, misnamed First Time Homebuyer tax “credit” offered during the 2008 tax year, a program that turned out to be a meager effort by Congress to prop up the then-imploding housing market. Homebuyers who took advantage didn’t actually receive a credit — they were granted what was essentially an interest-free loan of up to $7,500, to be paid back in $500 increments starting in 2010. Subsequent versions of the program granted homebuyers an outright tax credit, so the 2008 users already have something to moan about. via MSNBC

What the IRS has not figured out is that in the day and age of social media, those that are affected by their errors are not feeling isolated. There is a Facebook group that is providing information and consolation for those who have not gotten their refund. A Karina Winniford stated:

This whole situation sucks… but I am at least relieved to know that I am not the only one. I have been going thru the same thing. Took them 5 weeks to tell me they needed more information and then they gave a 2 week return window. Then another 5 weeks and ANOTHER error code. I have called twice to get it resolved. Now it will take ANOTHER 6-8 weeks to process… I want interest – this could have been sitting in my savings account.

This pressure will get the issue resolved sooner rather than later. I shudder to think of how these people would have been treated before Facebook and other social media tools that help them communicate.

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IRS 2008 Homebuyer Tax Credit Causes Problems For Taxpayers