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Inmates File Fraudulent Home-Buyer Tax Credit Claims

June 23rd, 2010

The $8,000 first time home buyer tax credit was designed to boost
the housing market and more importantly, to help Americans buy
their first house.

So, how is it that inmates, behind bars, in prison, were able to
receive checks? Apparently the cons found loopholes in the system
and took advantage of the situation.

A report prepared by a Treasury Inspector General, estimated that 1,295
prisoners filed fraudulent claims. The claims totaled about $9.1 million.

More than 2.6 million home buyers were able to benefits from this program
However, if one criminal benefited from the program  it’s one to many. The
IRS is taking steps to recover the money from this fraud.

The report also discovered that the IRS approved several claims that were
filed on the same house. Initially, the IRS did not require documentation to
prove if a person actually purchased a house. In credit to the IRS, over 400,000
questionable claims were denied. The savings to the American taxpayers was more
than $4 billion.

According to the National Association of Realtors (NAR) an estimated 44% of
buyers  would not have closed their transactions without this tax credit.

The Government is looking for the IRS to take action and recover any money that was paid.

Entry Filed under: Mortgage scams