Why It's Gotten Harder For You To Fight The Tax Man

Micah Andrews opened his first notice from the IRS a week before Christmas in 2010. He was standing in the kitchen of the house in the Atlanta suburbs that he and his wife had bought to make space for their new baby. Two years earlier, when the couple had purchased the home, they had considered themselves lucky. In 2008, to buffer the effects of the economic downturn, Congress had voted in a tax credit of $7,500 to first-time home buyers. The couple applied for the funds and moved in November, shortly before their daughter was born. A few months later, they received the credit.

Opening the letter, Andrews, who manages the technical crews at the Georgia Aquarium, was astonished. It was a bill for $8,609.73. Not only had the IRS rescinded the credit, he was being charged about $1,000 in penalties. Everything was due within a few days.

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