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IRS to Send Letters to Taxpayers Who Claimed Certain Credits

Categories Tax Tips (Fed)

During 2010 some taxpayers erroneously received the Making Work Pay credit. A letter is being issued to taxpayers to ask for repayment of this erroneous credit if they have not already done so.

Taxpayers who were denied the nonrefundable portion of the education credit on their 2009 returns will also be receiving a letter from IRS. A programming error created this problem and has since been fixed.

A third set of letters regarding the home buyer credit is also being sent out. Taxpayers who took the credit in 2008, which must be paid back, will receive a letter reminding them that repayment starts in 2010. It will be sent to taxpayers claiming the credit in 2009 as a reminder that if they disposed of the home or changed its use, then the credit may need to be recaptured. A letter will also be sent to taxpayers when IRS’ records indicate a change in their property’s use – such as a sale. This may require a repayment of the credit.

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