@jr135
So, most of the problems with form 5405 are people getting the e-filed returns rejected. It sounds like you filed successfully (did you get your refund?) and now you are being asked "why did you pay us $500 on schedule 2 line 10?"
(Double check, is this letter for your 2021 or 2020 tax return? It seems early to be getting a letter for the 2021 season.)
That's weird, but the IRS is pretty screwed up overall. If you claimed the credit in 2008 (when it was a loan) and you are still living in the home, and you did pay the $500 on your 2021 return (or 2020, if that's what year the letter is for), then the IRS had some kind of computer glitch and sent the letter by mistake. You can send a letter back explaining that you claimed the credit in 2008 and were making your regular payment. (You might want to include a copy of your 2008 return, if you still have it, and maybe a spreadsheet showing the payments you have made and the amount remaining.)
