Inmates Cashing In On Home Buyer's Tax Credits

Inmates Cashing In On Home Buyer's Tax Credits

While the past year saw many potential home buyers struggling to find homes quickly enough to take advantage of the home buyer's tax credit that was put in place last year, apparently not all of the people who attained these tax credits should actually have received them after all.

Included in the over 14 thousand fraudulent claims that the Treasury Department has discovered are over 9 million dollars in claims that have been handed out to almost 1,300 prison inmates who were incarcerated at the time of their claims.

The Treasury Department reassures taxpayers that only about 0.5% of home buyer's credits claimed have been discovered to be fraudulent, whereas the majority of claims are from valid qualifying home buyers.

With the change in the home buyer's credit from a $7,500 interest-free loan into an $8,000 tax credit, the opportunity for fraudsters to cash in developed. Unfortunately, a variety of people across the nation saw this as an easy way to make $8,000.

The Treasury Department's reports on the frauds that have been discovered related to the home buyer's tax credit show that not just inmates have been hard at work trying to defraud the government out of funds; a variety of other people have also submitted claims without buying homes, sometimes with multiple people claiming to have all bought the same home or using home sales that happened outside of the time frame that the tax credit was active for. The estimated numbers of people who received money for homes that were bought before the new home buyer's tax credit went into effect is over 2,500 while there is also an estimated 10,000+ people who have fraudulently received tax credits for homes that were also claimed by other home buyers.

Even with the unfortunate occurrences of fraudulent claims for the home buyer's tax credit, the fact is that this stimulus has helped to offset the plummeting housing market that the nation has suffered during the current recession. The National Association of Realtors claims that it has, in fact, been instrumental in that process, generating over a million new home sales that home owners would have been unable or unwilling to engage in otherwise. Hopefully critics will remember that any process designed to provide assistance to struggling Americans is liable to attract fraudulent claims and this program has allowed a very small fraction of fraudulent claims to go through, which the IRS is working hard to correct now.

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