As with many good things in life - there are always a few people who are doing what they shouldn't. In this case, there are quite a few people claiming that they are eligible for the 8000 tax credit when in fact they are not eligible for whatever reason.
If someone tries to claim the 8000 tax credit and is not eligible, this is considered tax fraud.
And according to the AP, there are more than just a few people who are trying to claim the tax credit that shouldn't be.
Treasury Inspector General for Tax Administration J. Russell George told a House panel that more than 19,000 people filed 2008 tax returns or amended returns claiming the credit for homes they had not yet purchased. Those claims amounted to $139 million and it was not clear that the IRS planned to go back to verify that those purchases actually took place, he said.But that isn't the only way that some people are trying to defraud the system:
George said his office had identified another $500 million in claims, by some 74,000 taxpayers, where there were indications of prior home ownership.And even more shocking - there were more than just a few people who were under the age of 18 (and as young as 4!) who tried to claim the tax credit:
He told a House Ways and Means oversight subcommittee that they also found 580 taxpayers under the age of 18 who claimed $4 million in first-time home buyer credit. One was 4 years old.With the recent announcement of the extension and expansion of the 8000 tax credit, one can only hope that there are more controls in place to catch these kinds of frauds. According to Mr. George, the IRS has tightened up on the controls they had in place:
George said that while the IRS has since taken steps to tighten oversight, "some key controls were missing to prevent an individual from erroneously or fraudulently claiming the credit."Let's hope so. Losing a few hundred million to fraud isn't exactly the thing that is going to be what bankrupts the country...
But it sure doesn't help our overall financial situation.