Mad taxpayers start Facebook page
The IRS is having problems processing the returns of those who got the 2008 homebuyer tax credit. It's a small but vocal group.
This has not been a good filing season for the Internal Revenue Service.
First, Congress screwed around into December before passing tax laws that apply to 2010 returns. That forced the IRS to push back the start of the 2011 filing season for many taxpayers as it reprogrammed its computers.
Then, thanks to a glitch in those computers, the IRS erroneously demanded payments of folks whose direct tax debits are in the works.
Now there's a passel of first-time homebuyer credit claimants who are not happy about another IRS glitch that's placed their tax returns and, in some cases, their refunds in limbo.
The problem is with filers who claimed the original $7,500 homebuyer credit for the 2008 tax year. It wasn't really a credit back then. Instead, it was a 15-year, no-interest loan that has to be paid back, starting with 2010 tax returns.
Man, did we ever see this repayment chaos coming!
Relatively few filers affected, but all are angry
When the IRS notified tax professionals last week about the homebuyer credit hold-up, it noted that it was "aware of a programming issue delaying the processing of a small percentage of returns." The agency isn't getting any more specific than that on the number of affected filers.
Instead, an IRS spokesman pointed to filing data through mid-March showing processing of more than 66 million returns, of which 59 million resulted in the issuance of refunds.
And in the grand scheme of the millions of returns that flood IRS offices this time of year, the number of taxpayers affected by this programming problem is no doubt small.
Still, as I often tell the patient and long-suffering hubby, I know a lot more people have a lot worse problems, but my problems are what I'm stuck with and they matter to me!
That appears to be the attitude of taxpayers dealing with the first-time homebuyer credit repayment glitch. In a social media version of misery loves company, more than 1,000 of them have banded together on a special Facebook page, 2011 Tax Refund Delays (5405 form, 1301 or 1481 Error codes), to share their concerns and complaints.
As for when they might get some relief, and their refunds, the official IRS word is, "We are working quickly to resolve this issue and update our systems within the next few weeks, which will allow us to process these impacted returns. The IRS regrets this delay for impacted taxpayers."
Form 5405 special instructions
If you're paying back the 2008 homebuyer credit this filing season but haven't yet filed, the IRS has some advice on how to make things go more smoothly when you do.
For couples filing jointly but where the credit was claimed by just one spouse back in 2008, send in one Form 5405 showing that husband's or wife's Social Security number.
And where a couple bought the home and claimed the credit jointly, send in a separate Form 5405 for each spouse, equally dividing repayment on each form.
More from Don't Mess with Taxes and MSN Money:
Having a flat tax is too simple. The IRS as we know it would be abolished. Everyone pays say 15% on everything they purchase, 8% goes to the Feds, 5% to your respective state, and 2% to your county/city. This is much too simple and everyone would have to pay. The more you spend, the more tax you incur. No more getting back thousands for some that didn't pay it in the first place, and no more loopholes for the wealthy. I guess being fair to everyone at every level of income is just too complicated!
I am so sick of dealing with this monkey butt stuff we call government. If any of us owed the IRS they would be knocking on our door days before we had to pay them back to get their money, but it is okay for them to take months for our moneys due. They should be incarcerated just like we would be if we did not pay our money that is due. For the people that receive taxes back they look forward to that money at the beginning of the year to pay backed bills, to fix a roof and much more. There is no good reason that we do not have our money yet. Basically we need our money more than they need theirs and they are just harboring it.
I filed my return in early February (a paper return due to documentation requirements for some of the credits) and was told my refund would be direct deposited on March 11. It never showed up and I finally found out that they made a typo and sent it to the wrong account number!! They wouldn't tell me which account number they accidentally sent it to, so the bank can't even tell me if someone else has my money, and this is NOT a small refund! I call the IRS everyday, spend 45 minutes on hold, and get a different answer everyday about what they plan on doing about it and how long it's going to take. One agent even told me that if I had e-filed then this wouldn't have happened (not that it was even an option!). The credits I claimed are for adopting a special needs child, and after the adoption was finalized, we found out the caseworker lied and she has much more special needs than we realized. Now we're swamped with medical bills for ongoing treatment that insurance won't cover (no thanks to Obamacare) and were relying on the refund to help cover them. No one at the IRS will even attempt to find my money or do anything other than give me inconsistent, rehearsed responses.
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