It looks like we haven't heard the whole story on the Home Buyer's Tax credit yet. The IRS is examining more than 100,000 suspicious returns that claimed the credit. So, buyers who claim the credit need to beware for the possibility of an IRS audit!
It appears that others are questioning the cost of this poorly targeted benefit as well.
Ted Gayer, an economist at the Brookings Institution, a liberal think tank based in Washington, estimated that the current credit costs the government about $43,000 for each additional home sale it generates, because most of the two million or so home buyers expected to claim the credit would have bought a house anyway. Expanding the credit to all home buyers would raise the government's cost per additional home sale to more than $250,000, he said. - WSJ
It hardly makes news anymore that another government plan is rife with fraud:
Bonnie Speedy, national director of AARP Tax-Aide, a volunteer service for low-income people, suggested that abuse of the home-purchase credit appeared to be widespread, in part because of relatively loose standards for claiming the credit.
The credit "has some fraud issues because it's not being done at the time of the sale," said Ms. Speedy. "People are filing for the home credit who don't have a right to file for it." Taxpayers don't have to file their claims as part of a real-estate transaction and instead can file or amend their income-tax returns to claim the credit. -ToughMoneyLove.com
Now we have even more reasons NOT to extend the credit like the National Association of Realtors is lobbying furiously to do. Aren't you just excited to have these folks in charge of your health care options?
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