Dear home buyer, sucks to be you:
If you are an agent assisting a buyer with applying for the $8,000 tax credit, you might want to advise them to have all of their tax returns in order and squeaky clean going back a few years because according to The Real Estate Bloggers, the IRS is auditing 100,000 home buyers who applied for the tax credit.
Your client might have to have a panic attack if there is one tiny thing out of order, because as Tom Royce points out, the IRS tax code is over 67,000 pages long making the chances pretty high that a T wasn’t crossed or an I wasn’t dotted properly. But of course, the IRS is saying they’re auditing 100,000 claims of the million applicants due to their being “suspicious.”
What does it all mean?
- Is this a merited reactive measure because of the terrible loan situation and subprime loans the market endured?
- What will the expense be to taxpayers to investigate “suspicious” applicants?
- Why such a drastic measure when the credit was meant to stimulate housing (350,000 closings occurred that otherwise wouldn’t have, according to WSJ.com) yet now that the market is stimulated, the attitude shifts from pro-consumer to anti-consumer?
- Who on capitol hill spearheaded this effort or how was some proverbial whistle blown calling applicants suspicious?
- With the National Association of Realtors lobbying for the credit to be extended, how are agents being educated and prepared to deal with potential results (positive or negative)?
- Do agents that aren’t actively reading blogs or news sources even know this is going on?
- Will the 100,000 applicants raise eyebrows and cause audits for all applicants to the credit?
So what do you think- is this a safeguard to protect the market from the days of no doc loans (or “liar loans” as the media calls them), or is this a political play by the powers that be? On a sidenote, what do YOU think of the $8,000 tax credit?