Accounting & Bookkeeping & Small Business Forum

Anyone had experience with IRS rejecting credit for FTHC on self-constructed residence. We attached explanation of deal + copy of Certificate of Occupancy from local building inspector + closing statement (HUD-1) but it did not include a sales price on right-hand column under Seller's information. I guess a better question would be how long does it really take for IRS to do all their investigations and then issue the refund check? Thanks.

I don't have experience with this specific issue, but the first time homebuyer credit does apply to newly constructed homes, so if there was a technical issue with the IRS, or an error in your paperwork, it should be possible to resolve that. Unfortunately, when I've worked with the IRS on other issues in the past, I've found that they can be unpredictable in terms of how fast they work. When they think they've caught a tax cheat they can apply the pressure in a hurry and not let up. But questions or filing problems can drag on for months while you wonder what's going on. If you've done your part you will not be penalized while the response is delayed, but if you're waiting for a refund, it can get tiresome. There is no harm in contacting them to follow up. There should be a name or code or case number on your correspondence from them that will help you communicate with them.

I have prepared 6 credit returns, all were amended 1040X but none were newly constructed. Prior poster is correct, new construction would qualify for it. I would try to correct whatever deficiency the IRS has given you and have the title agent or attorney redraft the proper paperwork if it is missing the sales price on the closing statement. Be sure your taxpayers' signature is on the closing statement as well. My cases all went through without any IRS push back and the refunds were issued in the 9 week to 16 week timeframe, most were received after 14 - 18 weeks. Good Luck

Mark Williams

I prepared several returns returns claiming FTHC where homes were purchased and refunds were received without any problem. Was hoping that someone had some experience with self-constructed residences. Or, in the alternate, has anyone had FTHC claim rejected and then submitted correcting info and eventually received refund. If so, how long did it take for IRS to process refund claim?