Expecting a refund on an amended return? Think again.

Well, it's not that you'll never get it, but the average processing time is approximately 12-16 weeks according to IRS officials. The usual refund period for amended returns (1040-X) is 8-12 weeks so now you have to sit back for an extra month waiting on your refund. In fact, now that I think about it, if you file an amended return today and were hoping for the money before the holidays, it may be wishful thinking!

Scammers, swindlers and those darn first-time homebuyers are to blame. With the latest first-time homebuyer credit of $8000 with no strings attached, the IRS has been swamped with amended returns since folks that purchase in 2009 can amend their 2008 tax return to get their money sooner. And, when there is free money on the line, the scammers and swindlers smell an opportunity. The IRS has been inundated with fraudulent refund claims for the homebuyer credit.

With the increase in fraudulent amendments, the IRS is scrutinizing every single claim for the first-time homebuyer credit. The IRS suggests sending a copy of the HUD-1 settlement statement along with your amendment to expedite the process.

As of July 29, 2009, the IRS has executed seven search warrants and currently has 24 open criminal investigations in pursuit of potential instances of fraud involving the credit. The agency has a number of sophisticated computer screening tools to quickly identify returns that may contain fraudulent claims for the first-time homebuyer credit.

“We will vigorously pursue anyone who falsely tries to claim this or any other tax credit or deduction,” said Eileen Mayer, Chief, IRS Criminal Investigation. “The penalties for tax fraud are steep. Taxpayers should be wary of anyone who promises to get them a big refund.”

It's important to remember that whether you prepare your own return or use the services of a paid preparer, it is the taxpayer who is ultimately responsible for the accuracy of the return. Speak with a local Liberty Tax representative to see if you qualify for the credit.

-dr

Posted To: Tax Rants by David Rocci By: David Rocci On: Monday, September 07, 2009
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