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4-Year-Old Claims First-Time Home Buyer Tax Credit

Posted on October 23 By Francine Huff

Justin McHood recently wrote about whether or not Congress would extend the federal tax credit for home buyers. Many people have legitimately benefited from being able to claim the credit on their income tax returns, and there have been calls to extend it to more Americans.

However, government investigators say over 100,0000 taxpayers have fradulently filed for the credit. About 19,000 people who filed for a total of $139 million in tax credits didn't even buy a home, while about 74,000 filed $500 million in claims even though they didn't qualify as a first-time homeowner, according to an article in the Wall Street Journal.

At least one of the filers was only 4 years old, J. Russell George, the Treasury inspector general for tax administration, told Congress this week. The names of more than 500 people under 18 were on applications for the tax credit. In most of those cases, parents of the children filed the claims because their incomes were too high to claim it themselves.

So what happens to the people who attempted to commit fraud by filing the claims? They could be prosecuted and their tax preparers could face criminal charges.

While some opponents of the tax credit may see this as another reason not to extend the program, others say that more safeguards should be put in place to deter fraud if the program is continued.

This entry is filed under Real estate , Taxes , Mortgage fraud . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response.
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