Wednesday, June 23, 2010
The Treasury Inspector General for Tax Administration today released Additional Steps Are Needed to Prevent and Recover Erroneous Claims for the First-Time Homebuyer Credit (2010-41-069):
In its new report, TIGTA estimates that 14,132 individuals received erroneous credits totaling at least $26.7 million. These erroneous credits included:
- 2,555 taxpayers receiving credits totaling $17.6 million for homes purchased prior to the dates allowed by law.
- 1,295 prisoners receiving credits totaling $9.1 million who were incarcerated at the time they reported that they purchased their home. These prisoners did not file joint returns, so their claims could not have been the result of purchases made with or by their spouses. Further, TIGTA found that 241 prisoners were serving life sentences at the time they claimed that they bought new primary residences.
- 10,282 taxpayers receiving credits for homes that were also used by other taxpayers to claim the credit. (In one case, TIGTA found that 67 taxpayers were using the same home to claim the credit.) TIGTA auditors have not fully quantified the total of these erroneous credits, but all indications are that the total will be in the tens of millions of dollars.
Some of the improper payments involve IRS employees, TIGTA found. At least 34 IRS employees claimed the Credit despite indications that they owned a home within the past three years. This is in addition to the 53 IRS employees that TIGTA identified in August 2009.