Tax fraud in astounding amounts
According to the Treasury Inspector General for Tax Administration, individuals applying for first-time homebuyer tax credits have defrauded the government to the tune of $513 million.
The first time buyer credit offered a tax credit of up to $8,000 which ended in 2010, a credit that many economists claim fueled buying in an economy that was stalling out.
According to Reuters, “nearly 3.9 million taxpayers have received $27 billion dollars from the credit through the end of 2010.”
Ease of fraud and “erroneous” claims
An IRS statement claims tax refunds are the most subject to applicants’ cheating and said, “This complexity undoubtedly contributed to numerous errors and erroneous claims.”
In 2010, the IRS claimed they had stopped hundreds of thousands of false claims, but a year later, more fraud is being uncovered and the Inspector General is requesting that the IRS demand more documentation for home buyer tax credits.
The full audit has not yet been released by the Inspector General, but we anticipate when it is released that we will see more data similar to June 2010’s audit which revealed that over $9.1 million was paid to 1,295 prisoners who were incarcerated when they said they purchased their homes, and for one address, 67 taxpayers claimed the credit on the same home.