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950,000 Americans need to repay their homebuyer Tax credit

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By : Rudson Tren    99 or more times read
The sad news for those who claimed homebuyer tax credit for the year 2009 as first-time homebuyers is that they will now have to repay the Fed! A report from the Tax Administration's Inspector General stated that out of 1.8 million people, 950,000 Americans are now required to repay the government.

This confusion came out, because there were two different credits for the homebuyers, depending on the time they purchased their homes. The two different forms are stated in simple terms below:

People who purchased their houses in 2008 would get $7,500 or up to 10% tax credit of the total purchase price, whichever was less. There was a simple catch in the whole scheme. This tax credit was actually a loan without interest and the homebuyers were required to pay this loan over 15 years.

Those who waited till 2009 enjoyed a much better deal. The Fed Congress turned this tax credit into a refund, rather than keeping it as a loan and also increased the credit amount.

What is next to adorning the platter full of problems? The IRS is all set to create a new strategy, which will be targeted towards separation of the tax payers for 2009 who must repay from those who are eligible for refund scheme.

The glitch that remains is that IRS is in serious trouble, because it is unable to differentiate between the purchases made in 2008 and the purchases made in 2009. This is a serious issue, because some buyers may start claiming that they purchased their houses in 2009 while they actually did so in 2008.

A report discloses that 4% out of 1.8 million who enjoyed the tax credit had wrong purchase dates registered with IRS. Again it happened that those who made purchases in 2009 were registered as purchases in 2008. This is a huge problem for the IRS. The problem became even more acute when a report from the inspector general showed that 1,326 people reported dead by Social Security Administration claimed credits of more than $10 million.

No matter what serious problems come up, the good aspect is that the foreclosure inventory is still rising. Well, it is good only for the prospective homebuyers and not the economy as a whole. This is good for these homebuyers, because they will not get into the tax credit glitch and yet enjoy heavily discounted prices for the preoccupied homes.
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