Monday, October 25, 2010

Pity Party, Table for Two

Phil and I are down in the dumps lately.  Since Thursday night to be specific.  That was when I opened the mail to find a letter from the IRS.  Of course, my heart started pounding just seeing a letter from them, and when I opened it, I think my heart stopped for a second.

They say we owe them $10,000.

Back when we purchased our home from my parents, we qualified (or so we thought) for the First Homebuyer's Credit of $8000.  That credit was put in place for people just like us, who needed a little help to buy their first home, which would in turn help stimulate the economy.  We bought our house specifically at the time the credit was offered because we knew that without that money, we wouldn't be able to afford closing costs/taxes/insurance. 

Well, the little hitch at the time was that you couldn't buy a house from your descendants.  So I couldn't buy the house from my parents.  However, we talked to a CPA and friend who advised us to put the house in Phil's name only, and that way, he would not be buying the house from a descendant.  Legally and morally we would be able to get the credit.  And we did get the credit when we filed our taxes earlier this year.

So imagine our surprise when they asked for the $8000 credit back, plus $1600 in penalties and a few hundred dollars in interest...totalling $10,000. 

We looked into the laws, made some calls to the IRS, and discovered that they had changed the law in November 2009 (we bought in Feb. 2010) to say that you couldn't get the credit if you bought from your in-laws.  Ironically, you can buy from your brother or sister, but not your in-laws.  Hmmmm.

Right now, we are sending emails to our Congressman, and still trying to figure out if/how to fight this.  I'm not sure if we have any grounds to stand on, since it was a law, we just didn't know about it. 

It hurts because financially, we don't have that kind of money (that's about 18 weeks of Phil's take home pay), and because we feel unfairly targeted.  Huge corporations can find loopholes to get out of paying millions in taxes, and then they come after the poor guys who used their credit for it's intended purpose.

Please pray for us, I've gone through three stages of grief...Denial, Anger, Bargaining, and now I'm just in Depression.  Next comes Acceptance, and hopefully I'll get there.

23 comments:

  1. Oh, boy. That makes me so sad, because you're right--wealthy families with a crooked CPA can squeeze a whole college education worth of grants out of the government while the oldest of 9 kids whose parents aren't paying a dime toward college gets $0. Corporations with number crunchers can own land and get paid not to farm it, or wiggle out of $10000s in taxes while the rest of us just about cry at what disappears from our paycheck every two weeks.

    I'm so sorry you have to deal with this, Colleen. I know the sinking feeling that must be pulling at your stomach and the worry. I can imagine. I will pray for you tonight (and continue to do so).

    ReplyDelete
  2. Oh Colleen, what an awful shock! I am so sorry that you and Phil have to deal with this, especially since you did take such pains to make sure you were doing the right thing. I'm praying for you and your peace of mind.

    ReplyDelete
  3. i am SO SORRY.. i would be livid.. then upset..

    you guys will def be in my prayers and thoughts.. please keep us updated...

    ReplyDelete
  4. Oh no Colleen! I am so sorry to read that! Gosh, what a horrible surprise!

    I will pray for you guys, I really hope God provides a way for it to work out in your favor.

    ReplyDelete
  5. I am so sorry for this Colleen. I will pray for a good outcome for you both.
    I would continue to write letters and see if you can find someone who will help get you out of this.
    xoxo

    ReplyDelete
  6. Oh, Colleen, so sorry to hear about that! We will be praying that you are able to get it all worked out.

    ReplyDelete
  7. WOW-that is awful! Definitely praying for you!!!!

    ReplyDelete
  8. Ugh! How frustrating! I will be praying for you guys!

    ReplyDelete
  9. OH NO! I'm so sorry. I will be praying for a fair solution to this!

    ReplyDelete
  10. Colleen, my comment is pretty much what everyone else has posted to you already. Keith and I often discuss how things like this happening to good people. Will pray for you. Sometimes when I get very upset and stressed I make a list of the things that I'm most thankful for, simply to change my mood or put things in better perspective. Just a thought. :)

    ReplyDelete
  11. Oh - I am SO sorry. Grief is right. I would be in such grief.

    We had a glitch with out house a month or so back, and it was a nightmare. Blessedly, it was a glitch - and it is being corrected, but the tears, worry, and nightmare...wow.

    I am so sorry...praying for you!!

    ReplyDelete
  12. I am so sorry, that's so unfair. Millionaires save thousands and thousands in taxes due to laws they lobby for, but the working man just can't catch a break.

    I'm praying and sending you hugs.

    ReplyDelete
  13. I am so sorry that you are going through this. It is hard when you try to do everything right and somehow it turns out wrong. I hope something works out for you.

    ReplyDelete
  14. Oh Colleen,

    I am so so sorry! I pray that it all works out in the end. I really feel for you. That would be really really hard for us too!

    I can't even believe it.

    Prayers for you two!

    Tina

    ReplyDelete
  15. I am SO sorry to hear about this Colleen. Taxes are so, so confusing. I do not understand how anybody knows what can and can not be done and what they should do. Frustrating! Your family will be in my prayers!!

    ReplyDelete
  16. Pull up another chair..I think we're all joining you and Phil at your table. Pity party, no way, a VERY unfortunate circumstance that needs lot of prayers. That's what we're here for.
    So sorry to read this. That is a big amount of $$ to come up with. Sending prayers and hopefully some answers are right around the corner. {hugs}

    ReplyDelete
  17. Oh my gosh... that's horrible! keeping you guys in my thoughts and hoping that somehow it works out! :)

    ReplyDelete
  18. oh Colleen.

    I am so sorry to read this. I will pray for a solution to this problem.

    ReplyDelete
  19. Oh, I'm so sorry! I pray that you will find some resolution to this very quickly. I can't imagine the stress you are under! May God bless you!

    ReplyDelete
  20. Buy lots of lottery tickets!!!!

    Just kidding. Trying to find humor in the hard times. Thats what gets me through the ups and downs of life.

    This stinks and I hope all gets better soon.

    ReplyDelete
  21. Oh this is just awful, Colleen. I am so sorry to hear. I will definitely be praying. Don't give up, there has to be something.

    ReplyDelete
  22. I'll be praying for you guys. Expect God to show up in a big way and He will!!!!

    ReplyDelete

Talk to me...