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Even Prisoners Get a Home Buyer Tax Credit

Even Prisoners Get a Home Buyer Tax Credit

The IRS is working to get money back that was mistakenly given out to over 1,300 prison inmates. More than $9 million in tax credits earmarked specifically for home buyers has been now claimed by prisoners and 241 of them are serving life sentences.

What is the government to do - arrest them?

None of these inmates filed joint claims so there is not even a spouse to go after. This complication is largely due to the fact the IRS does not keep accurate records of everyone who is actually in incarcerated.

Apparently, prisons are not required to give out information about inmates and do so only on a voluntary basis. The IRS has now asked Congress to rectify this situation by enacting laws that would get them more up-to-date data on prisoners. Since all of this is funded by our tax dollars a record of who is in prison seems as though it would be pretty standard information.

The Home Buyer Tax Credit has already been extended once. And, the National Association Realtors has claimed that it has generated 1 million new home sales that would otherwise have not occurred.

But, the program has suffered some blemishes. Along with the erroneous credits that have been slated for prisoners, another estimated 10,282 taxpayers have wrongly received credits for homes that were used by other taxpayers in order the claim the credit. The actual amount of money involved is not clear but is estimated to be in the tens of millions of dollars.

When the government sets up a program to help stimulate the economy might it not be a wise idea to try to install some oversight at the same time?

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Posted by Claudette Millette - Metrowest Mass Buyer Broker on 06/27/2010 07:12 PM

Comments (18)

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18 Comments on Even Prisoners Get a Home Buyer Tax Credit

JUN

2010

I don't get it. How did the prisoners get the money? Did they file taxes this year?

Claudette...

This doesn't surprise me one bit.

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Crazy. And here we are so worried about legitimate home buyers not getting the tax credit.

Crystal:

Yes, prisoners can file tax returns. There were a number of sources for this piece but one of them was CNN Money.

"4,608 state and federal inmates filed for the tax credits and faudulent refunds were doled out to 1,295 to them."

Here is a link to that article:

CNN Money Article

I saw that on the news the other day. It's amazing that these prisoners were even able to get away with this. And, like you said, what can you do....arrest them?!!!!

Claudette, I'm not surprised by this either. Oversight would seem to be a no brainer and the really sad thing is that we seem to be getting used to this sort of ineptness.

Richard:

I guess it should not surprise us. But should they really be filing tax returns from prison?

Tim:

Right you are. The ones who have done everything they can to get the credit now have to watch it go away after June 30 - this wednesday.

Craig:

Indeed - what recourse do you have against someone who is in prison for life? No negotiating room there...

Nick:

There really seems to be little oversight for something that is costing the taxpayers millions of dollars at this point.

I saw this the other day and like many of us, we were not surprised, but shame on our government...and too bad for the $$ that was supposed to stimulate our housing market and help homebuyers...So Crazy to read about this happening, Thanks for sharing, Jen

Jennifer:

As with every government program there is bound to be some abuse. I guess we just do not think of inmates as filing tax returns and if they do, how can they get away with claiming to have bought a house?

C'mon, Claudette, what are you thinking. The government oversight to avoid corruption. What a novel idea.

JUN

2010

I'm speechless. There's buyers under contract right now who have been trying to close by the June 30 deadline and would love to have a time extension to be eligible for the tax credit. So let's see, 10,000+ taxpayers received the credit who weren't supposed to, and 1300+ inmates got the credit and they're in jail. Doesn't the taxpayer have to provide a closing statement to the IRS to show proof of purchase? If not, they should be. Thanks for the post, Claudette.

Jane:

That would be novel, wouldn't it?

Pamela:

You are so right. So, they may not totally get away with it in the end. But, in the meantime, we have to expend more resources and tax dollars just to try to clean this mess up.

Im sure they gave the money to their family or it went up their nose already. Shame

JUN

2010

Wow! Another perfect example of government incompetence and waste of our tax dollars.

National Security:

I am not sure where the money went but the Feds are trying to get it back.

Michael:

It makes you wonder why they would be allowed to file a tax return that claims they have bought a house when they are not really available for house hunting at the moment.

JUL

2010

So go to jail AND you can collect 200 dollars. Sounds like Monopoly to me.

Hi, Robert:

In these cases, I think it was more like $8,000 or $6,500 but, yes, Monopoly is a fun game.

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Claudette Millette - Metrowest Mass Buyer Broker

Ashland, MA

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