HOUSING RIP OFFS Ripping off taxpayers (again)

THOSE FIRST-TIME HOUSE BUYERS MAY NOT BE BUYERS AT ALL, OR ELSE THEY MIGHT NOT BE FIRST TIMERS.

Treasury Inspector General for Tax Administration J. Russell George told a House panel that more than 19,000 people filed 2008 tax returns or amended returns claiming the credit for homes they had not yet purchased. Those claims amounted to $139 million and it was not clear that the IRS planned to go back to verify that those purchases actually took place, he said.

George said his office had identified another $500 million in claims, by some 74,000 taxpayers, where there were indications of prior home ownership.

The best part is that "the IRS did not require taxpayers to provide documentation to substantiate the purchase of a home. They were told by the tax agency that it did not have the ability to accept such documentation electronically." And, "He told a House Ways and Means oversight subcommittee that they also found 580 taxpayers under the age of 18 who claimed $4 million in first-time home buyer credit. One was 4 years old."

The IRS is investigating.

As of the end of September the IRS, according to the GAO report, has frozen more than 110,000 refunds pending civil or criminal examinations, identified 167 criminal schemes and commenced 115 criminal investigations.