IRS Loses $513M to Tax Credit Cheaters — New York Real Estate

IRS Loses $513M to Tax Credit Cheaters

by Raja Tayeb on April 18, 2011

Home Buyer Tax Credit Fraud

An investigator with the Internal Revenue Service says the government likely paid $513 million in home buyer tax credits to people who did not qualify for it, according to a new report released today by the inspector general.

About $326 million went to more than 47,000 taxpayers who did not really qualify as first-time home buyers, according to the report. The remaining money went to prison inmates and taxpayers younger than 18 who did not even purchase a home.

The home buyer tax credit offered up to $8,000 to first-time home buyers and $6,500 to existing home owners who purchased a home in 2009 and 2010.

In February, the Justice Department announced it was cracking down on nationwide false claims for tax credits, after suing several tax preparers across the country who were trying to claim the home buyer tax credit even though they were ineligible.

Among the cases, a McAllen, Texas, man was accused of claiming at least $985,000 in tax credits in 2009, and in a Philadelphia federal court case, federal officials were accusing a tax preparer of claiming at least $1.2 million in tax credits in 2009 for his customers.

Read more:
Lawsuits Mount on Home Buyer Tax Credit Fraud

Source: “Investigator: IRS Pays $513M in Homebuyer Tax Credits to People who Probably Don't Qualify,” Associated Press (April 15, 2011) and “Lawsuits Mount on Home Buyer Tax Credit Fraud,” REALTOR® Magazine online (Feb. 10, 2011)

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