First Time Homebuyer Credit: How Long Do I Have to Wait for My 8K Tax Credit?

The $8,000 first time homebuyer's credit was created to help boost the housing market and help revive our nation's struggling economic conditions. I believe that this is an absolutely wonderful incentive for potential homebuyers. Often, buyers just need that little extra kick in the butt to make that move. Many people become gun shy when about to make such a big investment, but this homebuyer credit certainly helps relieve some of that anxiety! Sure, $8,000 won't make you rich and it might not even help you pay off half of your bills, but it is still a great motivating factor for people to buy their first house. And lucky for the people who have to buy a home, the first time homebuyer credit continues to get extended!

It's all great and super duper, right? Um, nope. To say this homebuyer credit has created a messy situation for the IRS would be a severe understatement. Approximately 1 out of 5 people that are claiming the first time homebuyer credit are not even eligible, thus, causing the IRS to pay close and special attention to each homebuyer claim and delay returns. Sure, nobody wants to see people "steal" free money; however, what about the rest of us who rightly deserve it? What about me? As an individual who bought his first home in July of 2009, I felt nothing but FRUSTRATION with this entire process. Let me give you a rundown of my story. Keep in mind that my story is not just a fluke . . . similar stories are shared by several other first time homebuyers.

-I filed my taxes on February 17, 2010 and mailed in my return along with a copy of my settlement statement, which is required in order to claim the $8000 credit.

-On April 23, 2010, I received a refund, which was directly deposited into my checking account. Just one small catch, though. My refund was exactly $8,000 less than what I was expecting it to be! My first time homebuyer credit was denied?!?! I then called the IRS to inquire about what the heck was going on! The IRS representative who answered the call was no help to me at all. She could not explain to me why I was denied the credit. The only thing she could tell me was that an explanation would be provided in a letter dated May 5, 2010. Great! The next day, I called again, hoping I would get an IRS representative that possessed a little more information regarding my situation; however, I got the same response . . . again, I was told to wait for my letter to find out why I was denied the tax credit.

-On May 8, 2010, I received the much anticipated letter. When I opened the envelope, I was in complete shock! The letter revealed that the reason for me being denied the $8000 was because of a "Prior Home Ownership!" In order to keep this blog clean, I will not share the words that came out of my mouth when reading this letter. I was in pure disbelief to say the least. I had NEVER owned a home prior to my house purchase in July 2009. From 2000 to 2009, I was a renter at various apartment complexes. Prior to that, I lived at my parent's house! Furthermore, my name has never been added to any properties in the past. I immediately placed a call to the IRS and spoke to another representative. After listening to me rant, the representative checked my records. She had access to my records from 2003 to present. Amongst those records, she found NOTHING revealing any prior home ownerships! She was completely baffled as to why I received the letter and was denied the credit. Silly me, I then thought we could quickly fix this problem by having this representative push a couple buttons and getting my $8,000 to me within the next couple of days. Yeah, right! She advised that the only way this could be resolved was if I wrote a letter that explained my story of being a first time homebuyer and not owning any previous properties or homes. I was like, "OK, so I have to prove that I have never owned a house? I'm not even sure how to go about that?!" If anyone has to prove anything, they should prove to me that I DID own a house!! I was advised to send a letter listing all of my past addresses, which I did the next day.

-Around the end of May, I called to confirm that the IRS received my letter. They confirmed that they received it, but it was not being worked on yet. No further information could be provided other than them telling me I would receive a response within 45 days!!

-During the first week of June, I called again just to see if I could gain any more information regarding my status; however, I received the same response. I was told to wait until the 45-day period was over before calling again.

-Still impatient, I called during the second week of June. This time, the IRS representative was very courteous, although, very confused. She stated 'Your money has already been refunded. I don't see any pending action under your file. The last action was in late April when you received your refund.' So, for the next 15 minutes, I had to explain to her that I received a letter AFTER April and that I SENT a letter in response. She then put me on hold and double checked her records . . . when returning, she was like 'Oh, you're right, you should have a credit coming to you shortly.' She predicted a refund would be delivered to me by the end of June.

-The end of June arrived and I still had no refund. Furthermore, the 45-day waiting period to get a response to my letter had expired! During this time, I received NO letter or refund! It was almost as if I didn't exist! I called the IRS and was advised that since the 45-day period had expired, my file would be "referenced" to the case worker. I'm not even sure what that means. Is that another phrase for saying that a reminder will be sent to the case worker to get his/her butt in gear and finally start working on my file?? I was then advised that I would have to wait up to 30 more days for someone to get back to me! Are you kidding me?! If I received no response or letter in 30 days, I was told that I would be assigned a tax advocate, who would apparently work one-on-one with me to gain a quicker solution. I then wondered to myself how long I would have to wait to receive a phone call from this tax advocate if this 30-day period expired. Another 30 days, perhaps? If I didn't have receding hair, I would've totally yanked a few dozen strands out! The frustration just seemed to mount higher and higher during this entire process. I just wanted my damn money!

-To check on the status, I called again during first, second, and third weeks of July. The only responses I could get were "Your file is being processed. Please continue to wait."

-Much to my shock, I received a call on Wednesday, July 21, 2010, from the IRS. The IRS representative informed me that they reviewed my case and the letter that I sent them, and the final verdict was that they decided that I would be allowed to receive the $8,000 tax credit! She advised that I would receive the money in the three to four weeks. As a man that was ready to lose all hope, this phone call came as a complete surprise to me! I was extremely excited, although, the money was still not in hand yet, so I tried to remain calm. I didn't want to pop open that glass of champagne until the money actually arrived!

-On August 4, 2010, the frustration finally ended. I received my much awaited money, as well as ~$100 in interest. After having to wait so long, this moment seemed a bit surreal! I guess I better spend that money before the IRS tries to take it back for some inexplicable reason!

So, let my story be a lesson to all of you people that are excited about buying their first homes and earning an easy 8K. YOU WILL get your money, but chances are, you won't get it when you want it! Learn to be patient, and for crying out loud, don't rack up your credit card balances as you wait for it!

If you would like to read more first-hand stories about the agonies of waiting for the 8K homebuyer credit, go ahead and check out the following link.

http://www.lvrealty.net/news/first-time-home-buyer-tax-credit#comment-5157