The government has uncovered a fair amount of abuse with taxpayers erroneously claiming the $7,500 or $8,000 first-time homebuyer credit. Some of these taxpayers didn't own a home or hadn't purchased one, among other errors. (See my 2/27/10 post - Amazing Disrespect for the Tax System and Fellow Taxpayers.)
When the credit was last extended in November 2009, Congress addressed these problems with some changes including requiring that the settlement statement be attached to the return. I've got a short article in the AICPA Tax Insider on the credit and current reporting requirements - here.
Certainly there is also a good policy question here too - was this a good measure or does it just further cause the tax law to distort investment decisions to encourage investment in housing over all other types of investments and bringing the effective tax rate on housing to about zero? I'll save that topic for another day.
The article has links to the law changes and helpful information on the IRS website. Certainly, any eligible taxpayer seeking a nice gift from the government (that is, from other taxpayers) for the purchase of a new home, should take a look at this now as it expires soon.
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