New 5405

[solomon]

...........

Information regarding Form 5405
(first-time homebuyer credit)
Changes made by Public Law 111-92, the Worker, Homeownership, and Business Assistance Act of 2009, require changes to Form 5405 for homes purchased after November 6, 2009. We will issue a December 2009 revision of Form 5405 to reflect these changes. A draft of the December 2009 revision of Form 5405 will be posted here soon. The first-time homebuyer credit may be claimed for homes purchased before November 7, 2009, for 2008 by filing the 2008 Form 5405 with a 2008 original or amended return. The 2008 Form 5405 may not be filed with 2009 returns. Only the new December revision, once issued, may be used for filing with tax year 2009 returns. Likewise, only the December 2009 revision may be used for homes purchased after November 6, 2009, regardless of whether the claim is made for 2008 or 2009.

[BP.]

From IRS today:
"Taxpayers who claim the (FTHB) credit on their 2009 tax return will not be able to file electronically but instead will need to file a paper return."

[AJsTax]

I read that notice today. We started talking about that issue and what to do if the client has a refund due that they want in a reasonable time. If you paper file you can expect at least 6 to 8 weeks delay with the 5405 and checks sure to be done on it. We are going to consider e-filing the return without the 5405 and then amending a short time later to add the extra credit. At least some of the refund could be received in a week.

Any thoughts or down sides to this idea?

[JohnH]

Most of my clients who paper file receive their refund in about 3 weeks, provided they enter proper information for direct deposit on the form. If it's important enough to them, they can also express mail it for about $18 extra, which will at least insure that it is received the next day and will provide confirmation that it was delivered. Not a bad investment in peace of mind when the refund is large.

[tilt53]

I thought I was getting all the bulletins, QuickAlerts, etc., but I can't even find this on the IRS site. Help.... What else do I need to sign up for?

[erchess]

Originally Posted by AJsTax

I read that notice today. We started talking about that issue and what to do if the client has a refund due that they want in a reasonable time. If you paper file you can expect at least 6 to 8 weeks delay with the 5405 and checks sure to be done on it. We are going to consider e-filing the return without the 5405 and then amending a short time later to add the extra credit. At least some of the refund could be received in a week.

Any thoughts or down sides to this idea?

Both of the firms I worked for before I hung out my own shingle will do what you are suggesting unless policies have changed since I left. The first firm taught me that the practice is technically illegal but the rule was not enforced. The second firm taught me that the people at the first firm were out of their gourds in thinking it was technically illegal. I would myself like to know whether it is or is not illegal. My guess would be that it is illegal since the initial return is signed with the meaning that it is complete and accurate to the best of our knowledge and belief.

[AJsTax]

Originally Posted by erchess

Both of the firms I worked for before I hung out my own shingle will do what you are suggesting unless policies have changed since I left. The first firm taught me that the practice is technically illegal but the rule was not enforced. The second firm taught me that the people at the first firm were out of their gourds in thinking it was technically illegal. I would myself like to know whether it is or is not illegal. My guess would be that it is illegal since the initial return is signed with the meaning that it is complete and accurate to the best of our knowledge and belief.

would it be illegal in this case? You are not required to take the credit even if you do qualify, that is one of the questions in the Q & A section on IRS website. The original return will be complete and accurate in regards to income and taxes owed. The amend would only be a claim for refund.
I am concerned that an original return with the 5405 will be slow going through the process because of all the checks that are going to be done on them.

We have often and sometimes at the suggestion of the IRS, filed a return without a form that was not available and then filed an amended return for the credit when the form was available or because of the e-file/ paper problem filed two returns. I have never heard or read anything that said it was illegal to do this. That is not to say that the information is not out there, just that I do not remember reading that.