The Other Side – Fraud in New Home Buyers Tax Credit
October 23rd, 2009 • Related • Filed Under
Earlier this week I lambasted the IRS for announcing that they would be auditing 100,000 applicants for the $8,000 tax credit. I am not a fan of the government creating honey traps and then using them to snare unsuspecting taxpayers with it or using the fear of the IRS to stop people from rightfully claiming their refunds.
However, there is no denying that there was fraud committed in the program. The Wall Street Journal does a great job of outlining some of the more egregious examples:
To encourage non-homeowners to buy homes, the credit is limited to those who haven’t owned a home in the past three years. But many cases of abuse appear to be designed by those trying to get around that restriction. Among Mr. George’s findings:
- Some 580 filers under 18 years of age had claimed almost $4 million in first-time home-buyer credits, including one that was just 4 years old. “Contract law generally exempts children under the age of 18 from being bound by the terms of a contract,” Mr. George said in written testimony. “Therefore, it is unlikely that these taxpayers would have entered into an arm’s-length transaction for the purchase of a home.”
- Some 74,000 tax credit claims worth $500 million came from taxpayers who had indications of prior home ownership within the preceding three years.
- Another 19,300 tax returns in 2008 were filed claiming the credit for a home that had not yet been purchased. Those credits totaled more than $139 million.
Montreal Canada. L`ile bizard. Large private mansion with concrete pool, sauna, nested in woods. with 6 large garages ...
Great points Tom - the flavor of the day solution is only adding to the instability and volatility.
When Washington ...
I see it all too often where owners decide to be investors without understanding that tenants have rights. Its ...
cont from above post.....
please contact me via e-mail if interested in the home listed
above.
jonieckstrom@yahoo.com 
This is a topic currently being debated in our local Real Estate Board here in Toronto Canada. Online, we ...
A property management company should realize that most potential tenants now will have a foreclosure or bankruptcy on their credit....as ...
my boyfriend and i just fell for the scam ourselves, it's sad what they are able to do. I am ...
Now is an excellent time for business people to buy if they have decent credit (I did not say excellent ...
Pingback by Real Estate Tax Credit Fraud | Santa Clarita Real Estate - REMAX of Santa Clarita - The Paris911 Team on 23 October 2009:
[...] Thanks to The Real Estate Bloggers for bringing this “Fraud in New Home Buyers Tax Credit” to th… [...]
Comment by Grovetown GA Homes on 25 October 2009:
Astounding! What happened to personal integrity?
Pingback by A Quick Overview of The 2009 First Time Home Buyer Tax Credit & the 2010 Home Buyer Tax Credit « Eastside Real Estate Buzz on 9 November 2009:
[...] important thing I noticed besides this all important difference in the two programs is there is more fraud protection with the 2010 home buyer credit than with the 2009 version of the fir…. 2009 Home buyer tax credit compared to 2010 [...]
Comment by Betsy on 22 December 2009:
American Law Firm succeeded where these programs from Obama could not. The bank Wells Fargo never offered me the program, rather they said I was not qualified for any of the programs. Funny how things change over time, because when the attorneys gave my lender a call, Wells Fargo magically worked things out for me. I cannot thank American Law Firm enough for what they have done, they saved my home when it went into foreclosure, and then proceeded to reduce my interest rate from 8% to 3.75% and my payments were cut in half.
Thank you American Law Firm.
Betsy