My client sent an article to me from USA TODAY that is very interesting information about the $8,000 first time buyer tax credit and it’s just really discerning and pathetic actually. In the article it stated that the IRS tracked thousands of fraud cases and is seeking tighter control. Apparently, nearly 1,300 prison inmates, including 241 serving life sentences, defrauded the government of nearly $9.1 million in first time home buyer tax credits, even though they were incarcerated at the time they claimed to have purchased a home. To top it off, these filings were not joint returns, so it can’t even be claimed that a spouse made the purchase.
The article also stated that 2,555 tax payers received $17.6 million in the first time buyer tax credit for homes purchased before the allotted dates set by this law.
Also, 10,282 taxpayers received tax credits for homes that were used by other taxpayers to collect the same tax credit. In one case, 67 taxpayers used the exact same home to claim the first time home buyer tax credit!
The IRS claims they are moving quickly to recapture credits paid to inmates and block fraudulent claims. There are of course civil penalties and criminal prosecution for anyone that fraudulently claims the first time home buyer tax credit. This was just amazing information to me in that a buyer is supposed to have documentation and proof of the purchase and such. Although, let’s face it, I am sure it is not that hard to falsify those documents to look like a legitimate purchase.
It is so sad that a program designed to stimulate the economy and housing market and get things rolling is taken advantage of and millions of dollars are basically stolen as a result. A program designed to be a big benefit to consumers and the economy then loses millions of dollars to fraudulent claims, plus whatever amount of money it costs to recapture and prosecute the criminals.
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