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Homebuyer Tax Credit For Inmates Serving Life Sentences

By
Real Estate Broker/Owner with Mike Bell, REO Broker - Realty World MBA

Remember the First-Time Homebuyer Tax Credit?   It was perhaps the only effective or successful federal economic program in the past five+ years.  Well, Even those rare government programs that actually work are fraught with fraud.  Go figure.

As early as last October, there were reports of fraud schemes and suspicious claims as the tax credit was set to expire and was being considered for extension (see DSNews 10/20/09).   That’s not so surprising.

What’s shocking is the recent report that prison inmates were able “to apply for and receive $9.1 million in homebuyer tax credits” (see DSNews 6/24/10).  This article refers to a Treasury audit report that further shows that 241 inmates serving life sentences received a combined $1.7 million in tax credits.

This sort of begs the question: what kind of income tax liability can you earn serving a life sentence behind bars?  Is there even any point in a federal tax credit?

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The same Treasury audit also indicates that $17.6 million in claims were allowed for homes purchased before the tax credit program.  It gets better, though, with the reports of post-refund claims resulting in investigation, $785 million, or post-refund claims resulting in denial, $438 million.  The IRS seems to be catching a whole lot more fraud than they miss, but still . . .

 

 

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Barb & Sal Dragotta
Macomb, MI
Macomb County Michigan

Mike..."But, still..."  great words that need no explanation.  How about the credit given to the 4yr old for her house purchase?  While it is true that 'good will out', sometimes it is hard to read about these things.  Have a good week.

Barb & Sal

Aug 23, 2010 02:41 PM
DARLA HALL
d + b Real Estate - McKinney, TX

Sounds very shady! I can't believe that someone serving a life sentence can apply for and get grant money when they will never set foot outside of prison.

Aug 23, 2010 02:44 PM
Paige Walker
Paige Walker - Pineville, LA
Real Estate Guru - Alexandria Pineville LA

It's ashame! My daughter who purchased her first home applied for the tax credit in April when completing her tax return. She just received her $8,000 last week!!! Crazy how the legit are put through the wringer and the scam artists already have their money!! Go figure!

Aug 23, 2010 02:53 PM