New Homebuyer Credit Form

The IRS issued the new form 5405 for those wishing to claim the Homebuyers Tax Credit on their 2009 tax returns.  The new form is for those who have not yet claimed the credit using an amended tax return 1040-X.  Now required, an executed copy of form HUD-1.  This documentation is required simply to reduce the fraud that was occurring in this program during 2009.  When you visit your tax preparer, you will need to bring a copy of this document along with your other standard supporting paperwork.  Inclusion of this document in your tax return filing means you must file on paper and cannot use e-file.  Unfortunately, this also greatly increases the time before you can get your refund.

On a side note…

The IRS is requiring tax preparers who file more than 10 returns to file all of them electronically next year.  However, if Congress comes up with another idea that ultimately requires paper filing like this one, which directive am I to follow?  As a preparer, I am attempting to get all my clients on e-file.  Why is there no provision to attach scanned documentation to a return that is filed electronically?  We all have scanners and the reduction in paper and handling time would be significant if all supporting documentation could be included via pdf at the time of return submission.