I recently received an e-mail from the IRS and it explained how they are starting to prosecute those who are committing first-time homebuyer’s credit fraud.  The main point of the article was to remind taxpayers and preparers that you can’t claim the credit until after your house has closed.  With this being the case, do not count on using the $8,000 tax credit for closing costs!  Also, a first-time homebuyer for credit purposes is someone who has not owned a home in the last three years.  If the tax payer is married, this rule applies to their spouse as well.

I have spoken to a few local realtors and mortgage brokers in my area and they are saying that closings are taking longer then they did last year at this time.  Their warning is:  if you qualify for the first-time home buyer’s credit and you plan on buying a house to receive the tax credit for 2009, you need to start the process NOW!  Remember, to qualify, you have to have closed on your house by December 1st, 2009.

http://www.irs.gov/newsroom/article/0,,id=211399,00.html?portlet=6