First-Time Homebuyer Tax Credit: Taxpayers' Use of the Credit and Implementation and Compliance Challenges

This is a print on demand edition of a hard to find publication. Congress enacted the First-time Homebuyer Credit (FTHBC) to assist the struggling real estate market and encourage taxpayers to purchase their first home. The credit initially was enacted in 2008 and revised in 2009. The 2008 FTHBC provided taxpayers a credit of up to $7,500 that must be paid back over 15 years. In 2009, the maximum credit for the 2009 FTHBC was increased to $8,000, with no payback required unless the home ceases to be the taxpayer's principal residence within 3 years. This testimony describes: (1) the extent to which taxpayers are using the FTHBC, including breakouts by state and income; and (2) IRS's implementation and compliance challenges associated with both the 2008 and 2009 credits. Charts and tables.

This is a print on demand edition of a hard to find publication. Congress enacted the First-Time Homebuyer Credit (FTHBC) to assist the struggling real estate market and encourage taxpayers to purchase their first homes. Congress enacted different versions of the FTHBC -- as part of the Housing and Econ. Recovery Act of 2008; the Amer. Recovery and Reinvest. Act of 2009; and the Worker, Homeownership, and Bus. Assistance Act of 2009. The three FTHBC provisions combined may result in total revenue losses to the fed. gov¿t. of about $22 billion through 2019. This report identifies: (1) the number of FTHBC claims and dollar amounts claimed for each credit version by state; and (2) state rankings, using selected statistics, such as the total dollar amount of FTHBC claimed in each state. Charts and tables.

The American Recovery and Reinvestment Act of 2009 (Recovery Act) was enacted to bolster the struggling U.S. economy at an estimated cost of $787 billion, of which more than a third was in the form of tax relief to the public. This report: (1) describes the status of the Internal Revenue Service's (IRS) implementation of Recovery Act tax provisions; (2) examines whether IRS captured or planned to capture data on the use of the provisions; (3) assesses IRS's efforts to determine potential abuse of the provisions; and (4) discusses possible lessons learned for future tax administration. Charts and tables.