IRS Employees Abuse First-Time Homebuyer Tax Credit

The First-Time Homebuyer Tax Credit was supposed to be a boon for Americans in tough times. Boy, was it! Many abused it including IRS employees.

The First-Time Homebuyer Tax Credit was passed in the middle of the real estate market meltdown. The real estate bubble hadn’t burst, it had gone up like a hydrogen bomb and many were wondering if we were heading into a second Great Depression. President Obama pushed through a $8,000 tax credit to stabilize the market. It did for the most part, but then the fun started.

Need Help with Tax Debt Problems?
Click Here To Talk to a Tax Expert

There was an interesting aspect to the new tax credit. You could get part of it back as cash. It was an aspect that just invited abuse and abused it was. The stories are legendary. There were thousands of inmates in prison that claimed it including no less than 250 people on death row! Those outside of prison were no better. In one case, 67 people claimed it for the same house! All and all, about 10 percent of the returns filed claiming the tax credit were rejected.

How bad was the abuse? Well, more than a few of the employees at the IRS thought it was a potential way to make a quick buck as well. Yes, the IRS. The people who bite you in the butt if you are a little short on money for your tax bill. The group that will freeze bank accounts, file wage garnishments and lien homes at the drop of the proverbial hat. Yes, those people!

Need Help with Tax Debt Problems?
Click Here To Talk to a Tax Expert

So far, the number of IRS employees who have been busted is 34. It is expected to climb. The IRS investigative unit found the employees were making claims on homes despite the fact records clearly showed they already owed homes. Given this, they weren’t exactly first-time buyers. There is no indication as to whether the employees were fired or not.

<< Tax News