The Buyer is the one who is responsible. They are the only ones that know for sure if they have claimed a home as a primary residence in the last 3 years. The IRS audits every request by verifying that a primary residence hasn't been claimed on tax return in the last 3 years for person and their spouse. I think some of the claims may be by people that don't realize they don't qualify. I get husband and wife asking me all the time can other spouse that is not on current mortgage buy and claim the tax credit. The answer is "NO".

John R. Thomas
Certified Mortgage Planner
Primary Residential Mortgage, Inc.
302-703-0727 DE Office
610-906-3109 PA Office
410-412-3319 MD Office
302-588-3665 Cell

The buyer is the one that knows if they haved owned a home in the last 3 years. When they file with the IRS for a tax credit they have to sign that they are eligible. Computers are a wonderful thing! The IRS has been running searchs on some people that are claiming the credit to make sure no property related deductions have been claimed over the last 3 years. They are prosecuting the fraudulent ones that they find.

Hi,
The buyer really is the one who truly knows whether they owned property in the preceding years or not,
and they are the ones who know whether they will and stay in the new property for at least 3 years....
Their Attorney and or Real Estate Agent, should have the terms for who can apply for the credit and pass them
on to their buyer clients, but at the end it is and should be the buyer/tax payers responsibility to know the rules
and as such before applying for it, or even buying a property intending to apply for it!

Hope this helps answering somewhat your question.
Edith karoline YourRealtor4Life! & Chicago and Northern Illinois Expert
Working always in the very BEST interest of her clients....
EdithSellsHomes@gmail.com
Century 21 SGR

Great question. Because there is fraud, everyone suffers - more is spent to detect and prosecute the fraud, people become skeptical of such programs, etc.
In reality, the buyer signs a document stating that this is his/her first home(or the 1st in the last 3 years) at settlement in Delaware. When that buyer files for the Federal Tax Credit again he/she must state that this is true. There may not have been adequate fraud detection mechanisms put into place to avert these attempts to defraud the government. This also may play a part in the problems.
Although we hear these cases brought out on the news (and they are reprehensible), there is much good in the tax credit provision. I hope as I am sure many of my Real Estate professional brotherhood and sisterhood hope, that there is an extension to this program. Hope this helps.........................chris