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Homebuyer Credit to Continue Helping People Get into Crazy Debt?
Maybe! The opportunity to take advantage of the current credit expires on November 30th. Luckily, the brain trust known as the U.S. Senate is all over this and is going to get a new plan in place come hell or high water.
The best part is that under the Senate’s latest proposal, the credit will now be “extended beyond first time buyers,” as reported by Bloomberg.
So, if you’ve lived in your current shack for five years and you’re looking to upgrade, you’ll be eligible for a $6,500 credit. First time homebuyers will still receive an $8,000 The new extension of the credit would be available for home purchases under contract by April 30, 2010 and close by the end of June.
But that’s not all! Under the new plan, the credit would be available for individuals earning $125k up from $75k and couples earning $250k up from $150k. Presumably more McMansions will get purchased this way.
More good news: this thing has bipartisan support:
Senate Minority Leader Mitch McConnell, a Kentucky Republican, agreed that most lawmakers support the unemployment and homebuyer measures. “We’re not that far away from an agreement,” he said earlier today.
Who knew it was possible? The problem is, not everyone thinks this is a good idea, including Joe Kristan over at Tax Update Blog:
It’s nice to know that a majority of the millionaires in the Senate think it’s wise to spend $40,000 to $80,000 of our money for each new home sale caused by the credit, even though the credit is rife with fraud.
The credit extension would be tied to an extension of unemployment benefits; the provisions may still be changed, and it has to be reconciled with a House bill that has no homebuyer credit provision.
If they extend it this time, does anybody believe they won’t try to extend it again every time it is set to expire?
And Tax Girl:
Does that cover everybody? Does everyone get a tax credit now? Cause we wouldn’t want to be handing out that free money and leave someone out.
My concern is that if people need the credit to get into a first home or move up to a larger one, are they getting in over their heads in debt? And isn’t that what got us into the economic trouble we’re in now?
Call us party poopers but we’ll go with accountants over the U.S. Senate any day.
Homebuyer Credit Extension a Done Deal? NOL Carrybacks Enhanced? [Tax Update Blog]
First Time Homebuyer’s Credit Likely Expanded [Tax Girl]
Reconfigured home buyer tax credit [Don’t Mess With Taxes]
Also see: Lawmakers Find A Way To Outfox 4-Year Old Tax Cheats [DB]
Maybe Everyone’s Expectations of the IRS Are Too High
The mother of all auditors, the Government Accountability Office, had heard some complaints that maybe the IRS wasn’t doing such a bang-up job on the whole Phase two.
After snooping around, the GAO issued a new report that explained that the IRS needs to work on explaining just what it is they do an why they do it.
Web CPA:
The IRS has no documented objectives for the notice phase and no performance measures to indicate how well the phase is performing in resolving debt cases or achieving other desired results…
…However, in almost all cases, for the five business rules the IRS identified as affecting the most taxpayers, the IRS did not have information on the date the rules were established, the rationale for the rule, or data supporting the rationale…
…IRS collection officials also lacked documentation describing the business rules and how they operate. Further, even though IRS officials estimated that the business rules had been established for years, IRS had documentation for an evaluation of only one of the five business rules.
Let’s recap:
• “…no documented objectives…”
• “…did not have information on the date the rules were established, the rationale for the rule, or data supporting the rationale…”
• “…lacked documentation describing the business rules and how they operate.”
• “…documentation for an evaluation of only one of the five business rules.”
Apparently this is one of those cases where the Service says, “Trust us, we have a plan. But don’t ask us to explain it, we wouldn’t want to bore you. Oh, and don’t ask us how well it’s working. We don’t get too hung up on statistics or success rate.”
We’re just talking about tax dollars after all.
IRS Has Trouble Tracking Debt Collection Notices [Web CPA]