I closed on a house in Oct 2009, qualified for and received the 1st-time homebuyers credit of $8000. Earlier this year my live-in girlfriend, who was NOT a buyer of the home, started an at-home business using my home address. The home is still my primary residence.
I recently received a letter from the IRS stating I must repay the $8000 tax credit because a business was started out the home. However, I can't find any information on my own to back this up.
Were there conditions for this tax credit regarding starting a business at home? Where can I find them, I researched but found nothing.
Can the IRS make me repay the 8 grand?

" must repay the $8000 tax credit because a business was started out the home. However, I can't find any information on my own to back this up."--->I guess, as you converted your primary home to your live-in GF's business use,your home is not considerd to be your main home any longer before the 15-year period has elapsed.So, you must include all remaining annual installments as additional tax on your tax return of 2010.
Please visit the IRS Web site;Publication 523 (2009), Selling Your Home