New homebuyer still waiting for tax credit eight months later - KWWL - Eastern Iowa Breaking News, Weather, Closings

New homebuyer still waiting for tax credit eight months later

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by Danielle Wagner

WATERLOO (KWWL) Coulter Wood and his wife bought a house in Waterloo in June. With a new baby at the time, and now another one on the way it was time to buy a house larger than the one they were renting.

They qualified for the first-time homebuyer tax credit, and thought now was the time to buy. They could only afford to buy and renovate this house with the first-time home buyer tax credit.

Expecting to get his $8,000 credit within a month or two, Wood started renovating the house. He said it needed work before they could move in with a young child.

"Our realtor explained it was a fairly simple process. You had to file an amended tax form, there's an additional one page you fill out that's your application for first time homebuyer's credit," said Coulter Wood.

In August he got a letter from the IRS asking for more proof he actually purchased the house.

"I understood they wanted to see some settlement papers, and I was happy to provide that but when I sent those in I expected to see a check shortly after that," he said.

But instead, in late November he got asked to provide more proof. Coulter said about 17 pages worth of it including more closure documents, a paystub and a copy of his drivers license with his new address.

Wood said he called the IRS on January 5 asking if he still had time to send in the paperwork. He said the IRS rep told him "you have plenty of time." So the next week, he faxed the paperwork to the IRS. But Monday, January 25 the family got a certified letter from the IRS.

"It stated our case had been closed. Our claim had been disallowed and we were not going to receive our $8,000 credit," said Wood.

The letter said his only recourse was to hire a lawyer and appeal the decision, which Wood doesn't think is fair.

"I don't want to let the IRS off the hook. This is money that was supposed to stimulate people to go out and purchase homes when the economy was not good, when home buying was down and you know it convinced a lot of people, including us that this was the time to buy," he said.

Wood wrote letters to our U.S. Senators and Representative, hoping to get any help to get his $8,000. He also plans to contact a tax advocate for assistance.

KWWL spoke with someone with the IRS who said she couldn't comment on this instance.

We also spoke with Wood's realtor on the phone. She said initially people were getting the credit within 30 and 60 days, but there were reports of fraud so now the IRS is asking for more proof and the process is taking closer to six months.

Reporter: Danielle Wagner

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