Don't need answers today - next week would be nice

[Catherine]

Former clients now doing their own returns sent an email about a potentially missed first time homebuyer credit from ages ago. Assuming they still have full documentation, and there were one or more payments missed, is it still Form 5405 and flowing from there into Schedule 2? Just pick up where they left off? Penalty abatement or waiver needed for this?

Interesting that in all the years since (way more than 10) they received no letters at all about this. No idea how they found it, either. I told them I couldn't help them until next week. Today will be busy enough dealing with people who are paying me to help.

[Catherine]

and yes, I have links to https://www.irs.gov/taxtopics/tc611 and https://www.irs.gov/forms-pubs/about-form-5405

 

[BrewOne]

A lawyer would probably be talking statute of limitations.  I'm thinking no penalties on taxpayer's reporting of item missing from a filed return, just interest--but that may just be the way things should work.

[jasdlm]

I think that's really strange, because usually if there's a FTHB credit and a 5405 required, the efile will reject (in my experience ... having clients who didn't tell me they took said credit and needed to pay it back).

[Sara EA]

Did your clients sell that first home in the intervening years?  The credit owed is settled up at the sale.  If sold for a loss, it's erased.