A shocking new audit just released by the Treasury Inspector General shows rampant problems in the new home buyer tax credit program.
According to the report nearly 1,300 prison inmates — have defrauded the government of millions of dollars in home buyer credits.
Congress passed three different versions of this credit between August 2008 and November 2009. This report shows thousands of people literally took advantage of the program when they had no intention of buying a home and got away with it.
Here are some of the findings from the audit:
- 4,608 prisoners listed on the IRS 2009 Prisoner File attempted to claim the Home buyer Credit on their Tax Year 2008 returns, despite the fact that they were in prison at the time their qualifying home was reportedly purchased (951 of these claims were filed by paid preparers) 241 of these prisoners received Home buyer Credits totaling more than $1.7 million.
- 61 percent of the prisoners were in prison in Florida.
- The IRS started checking prisoner files, but those files are only updated once a year and incomplete. So the audit found 32 claims were filed before those filters were in place and three claims were processed after the filters were in place.
- 1,295 prisoners, including 241 serving life sentences, received $9.1 million in credits from their 2008 tax returns.
- 2,555 taxpayers inappropriately received Home buyer Credits based on homes purchased prior to the dates allowed for in the law. We’re talking a total of almost $18.8 million.
- An additional 4,385 amended claims received by the IRS had indications of prior home ownership but were never examined.
- 34 IRS employees that claimed the Home buyer Credit despite indications that they owned a home within the past three years.