Posted by
Sue on Thursday, October 22, 2009 7:35:52 PM
Well, the government has proven once again how badly they can run a program. There seems to be a lot of fraud in the homebuyer tax credit program. Shocking, I say.
The $8,000 tax credit for first time homebuyers was meant to bolster the housing market. It is set to expire December 1, 2009. Lobbyists for Realtors, homebuilders and mortgage bankers are pressing lawmakers to extend to expand the program.
Senate Majority Leader Harry Reid (D), Senator Chris Dodd (D) and senator Johnny Isakson (R) are strong supporters of an extension or expansion, but they and others in the House and Senate have yet to settle on a single way of continuing the program.
Today lawmakers on the House Ways and Means Committee "zeroed" in on fraud in the program. According to a new report from the Treasury Inspector General for tax administration, the program lacked important rules and requirements in its early implementation that have contributed to potential fraud. Fantastic!
A real highlight that will make steam come out of your head, "The IRS did not require taxpayers to provide documentation to substantiate the purchase of a home." Say what? WTH? Deja Vu all over again. We learn nothing.
The report found more than 70,000 taxpayers whose returns were processed by the government prior to new rules and filters. Another nearly 50,000 taxpayers did not claim the full amount that they were eligible for under the program.
"We will hear today that taxpayers claiming the credit include those already owned a home, who had not yet bought a home, and who are children – some as young as 4 years old." Rep. John Lewis (D-GA).
Lewis continued on, "There are millions of dollars that have been paid to taxpayers who are not entitled to the credit. We want to, and need to, stop this fraud and abuse."
Isn't that special. Maybe my dog could have bought a new home!
UPDATE
As a result of loopholes and numerous faulty reporting mechanisms, more than 500 people used their children to apply for the credit to get around income caps a requirement that they never purchased a home.
The total in fraud costs is standing at about a half a billion dollars. Yes, our tax dollars at work.
Also noted and found were nearly 20,000 returns for people who may not have actually purchased a home, thousands for people who already owned homes, more than 3,200 who could not prove they lived in this country legally and of course 53 IRS agents who took advantage of the program (and the number could rise).
According to the report, 1.4 families have claimed nearly $10 billion in credits, but that the speed of implementing the program meant policing fraud was at first unacceptably poor. No way, really. How about nobody read the bill.
Lame quote came from, Rep. Charles Boustany (R-LA), "If Congress decides to extend the homebuyer credit, both Chairman Lewis and I believe Congress should consider reasonable proposal to reduce fraud and improve the IRS' ability to administer the credit."
Say what? What do you mean "consider?" There is no considering here.
The Treasury has 107,000 civil cases related to the homebuyer credit, and plans special audits for thousands of additional returns. Well, isn't that swell. Geithner is on the case.
We are here from the government and we are here to help...Let the fraud begin.