October 22, 2009
Ah, the great american tax credit. Not a deduction, but a fully refundable tax credit. And when you can get into a house for 3.5% down or less (with seller or other first time home buyer program help) with the government’s help, what did you expect to happen? It seems we’ve come a long way since the days when practically anybody could buy a house.
“The tax credit was created to stimulate the economy and home sales. It was estimated that at least 2.2 million households would claim about $18 billion of tax credits. To date, about 1.4 million households have claimed nearly $10 billion. The majority of these households—60 percent of them—have incomes below $50,000.
“To ensure the credit achieved its goals, the Internal Revenue Service developed a program to timely process returns, and issue refunds, for those claiming the credit. I salute this effort.
“I am mindful, however, that this quick response came at a cost. The Service processed over one million returns claiming the credit before new fraud filters were in place. The result, so far, is that more than 100,000 exams have been opened involving the credit.
“We will hear today that taxpayers claiming the credit include those: who already owned a home, who had not yet bought a home, and who are children—some as young as four years old. There are possibly hundreds of millions of dollars that have been paid to taxpayers who are not entitled to the credit. We want to, and we need to, stop this fraud and abuse.”
So, are you laughing or crying?
[via Political Insider]
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