I might owe the IRS close to $10k, not qualified for first time home buyers credit?

When I divorced from my husband (Jan 2008) and bought a home on my own, closing date was Jan 2009, my realtor and loan officer encouraged me to file for the first time home buyers credit since it was my first time owning a home, or having my name in a mortgage and it was the first year for this credit to come out. ... show more When I divorced from my husband (Jan 2008) and bought a home on my own, closing date was Jan 2009, my realtor and loan officer encouraged me to file for the first time home buyers credit since it was my first time owning a home, or having my name in a mortgage and it was the first year for this credit to come out. I filed through Turbo Tax, the fed approved of it and gave me a check. I held onto it for a couple of months just in case it was a mistake. It's 2011 and they audited me and now they are saying that I was never qualified and disallowed the credit, because my ex husband owned the home and I was co owner, (although I was not on the papers and a homemaker, I truly believed this was my first time buying a home).

The money is gone, since my dad passed away that yr and I am still a single mom of 3 with one income coming in, and there is no way to pay the IRS back like how they would want me to. What can I do or ask about, when it comes to reversing it, waived.. etc?? The credit was $7,500 and a penalty of $1,500 plus $900 interest. If it was a simple mistake, I wont blame anyone but myself, and would pay back the $7,500 little by little, but the penalty fee and interest is a bit too much, and It was really just an honest mistake. Plus they didn't audit me until 3 years later..

I'm in so much stress right now, and very discouraged, please can somebody give me hope? Ive never had to owe the IRS and have always paid my taxes and due a refund.

I'm waiting for an IRS advocate to call me back, and I have a form 843 on my desk.. Im not sure what to do or who to speak to. Please somebody give me some light inside this dark tunnel!! Thank you!
Update: My name was not on title, not on deed and not on mortgage. I was married to the man, whose name was on all of those.
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