Friday, January 21, 2011

IRS is ramping up efforts to police the home buyer credit to stop fraud.

It plans to launch 200,000 audits this year of folks who took the credit, shifting personnel from other enforcement areas to handle the load. Remember, first time home buyers must enclose a copy of the settlement statement with Form 5405. Those who are claiming the $6,500 credit for taxpayers who previously owned a home should attach documents showing they owned a home for five consecutive years out of the last eight...records of property taxes, insurance coverage and the like.

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