The IRS claims to have "sophisticated computer screening tools" to indentify tax returns that may contain fraudulent claims for the tax credit. The IRS says it has executed seven search warrants and currently has 24 open criminal investigations of potential instances of fraud involving the credit.
"We will vigorously pursue anyone who falsely tries to claim this or any other tax credit or deduction" said Eileen Mayer, chief of the IRS' crimiminal investigations. "The penalities for tax fraud ar steep." Taxpayers should be wary of anyone who promises to get them a big refund."
Congress allocated $13.6 billion for the first time homebuyer tax credit program in the hopes of generating 2 million home purchases by Nov. 30.
Preliminary numbers from the IRS showed about 1.4 million taxpayers were expected to claim the credit on their 2008 tax returns, and that nearly 100,000 claims would be rejected because the applicants were not first-time homebuyers.
Be careful out there!