The IRS continues to struggle with the debacle that was the First-Time Homebuyer Tax Credit. The credit was claimed by a significant number of people whom did not not qualify. The IRS sent notices to those tax payers telling them that they needed to repay the credit. This underpayment of taxes is considered a no-interest loan bu the IRS. They have mandated that the loan must be paid back in 15 equal installments beginning with the 2010 return.

The problem was the notice was sent to many tax payers whom did qualify. The end result was a large number of people being confused about if they owe and if so how much and when is it due.

To help with all of the headache there is now a First-Time Homebuyer Credit Tool on the IRS website. Tax payers can enter their information and find out what they owe on their 2010 taxes and the remaining balance. The repayment should be claimed on form 5405.

If you took the First-Time Homebuyer Tax Credit.and have questions we have knowledgeable accountants who can help. They will make sure your return is filed correctly and help with strategies to limit your overall tax burden.