Diane Ferreira bought a condo in Norwalk with help from her father back in September. She expected to receive the $8000 first time homebuyer tax credit that she qualifies for fairly quickly, but she's still waiting for the money.
Ferreira says she applied for the tax credit by amending her 2008 tax return. "I went ahead and did that in October expecting the check no later than late January, beginning of February, and I haven't gotten anything yet," said Ferreira.
Local
She added granite countertops to the kitchen in her condo, and made other upgrades, expecting to pay for the work with her tax credit. The condo was paid for in cash, and she believes the lack of mortgage sparked extra scrutiny with the Internal Revenue Service. She contacted the agency and sent in the additional documentation they requested.
"They just kept telling me that everybody else is going through the same thing, that I'm not the only one that's been delayed at this point," said Ferreira.
The I.R.S. declined to comment on Ferreira's situation, or on delays in general with consumers getting their first time homebuyer tax credits.
Lucia Chubet, an accountant in Southington, says she's had a handful of clients encounter delays in getting their tax credits, with some waiting longer than six months. Chubet believes the I.R.S. is now taking a closer look at requests to deter fraud.
"We'd try to contact the I.R.S. to see what the holdup was and we'd basically just get answers like, 'Well, it's in review. Someone will contact you in 30 days.' They really wouldn't give a clear response as to why, what was holding things up," said Chubet.
Recent government audits uncovered tens of thousands of people cashing in on homebuyer tax credits that they weren't qualified for. The reports from the Treasury Inspector General for Tax Administration put the cost to taxpayers at hundreds of millions of dollars.
Among the people who cashed in and shouldn't have were people who had already bought another home within the last three years, people who had yet to close on their new homes, and people who bought their homes prior to the tax credit taking effect.
The audits also found multiple people claiming tax credits for the same house and that even children, prisoners, and I.R.S. workers were wrongly taking advantage of the program.
"I think there probably should have been some stricter requirements put into place to keep it from getting out of hand," said Chubet.
To crack down, the IRS is now trying to recapture some of that money. They've also closed some loopholes, and are now requiring all applicants to submit supporting documents. Initially, no proof of ownership was required.
With the new checks in place, homeowners like Diane Ferreira are caught in the mess. "You're fighting with the I.R.S. for something that you really should have received five, six months ago," said Ferreira.
Ferreira just received good news from the I.R.S. Her first time homebuyer tax credit was just approved, and she's been told to expect a check with interest sometime over the next two months.
