Nearly 60,000 individuals who purchased homes in 2009 could get a notice from the IRS improperly demanding that they repay their homebuyer tax credit, according to the Treasury Department.

An audit by the Treasury Inspector General for Tax Administration found that the IRS erroneously recorded their home sales as taking place in 2008 or failed to record the date at all. As a result, they could get a notice informing them they need to begin repaying the credit over the next 15 years.

The mix-up is a result of the various rules Congress passed in enacting, modifying and extending the tax credit. As originally enacted in 2008, first-time homebuyers were entitled to a tax credit of up to $7,500 in the form of an interest-free loan, to be repaid over the next 15 years.

In March 2009, Congress raised the tax credit to $8,000 and eliminated the requirement that it be repaid, provided the property remains the buyer's principal residence for three years. However, it made the rule retroactive only to Jan. 1, 2009 - meaning that those who bought in 2008 still had to repay the credit.

Nearly 1.8 million first-time homebuyers received the tax credit in calendar year 2009, according to the IRS. Of those, nearly 296,000 bought their homes in 2009; the law allowed some homeowners who bought their homes in 2009 to file for the credit on their 2008 return.

The inspector general's audit found that 60,000 of those, the IRS improperly recorded their purchases as taking place in 2008 or failing to record a date at all, meaning they could receive a letter improperly demanding that they begin repaying the credit.

Another 515,000 submitted amended tax returns on which the purchase dates were not recorded by IRS computers and therefore could not be verified. Approximately 960,000 credits were claimed by homeowners who did purchase their homes in 2008 and need to begin repaying the credit this year.

The IRS is taking steps to identify homebuyers whose purchases were improperly recorded and correct the problem.

Published on September 2, 2010