IRS Investigating 100,000 Suspicious Claims For First-Time Home-Buyer Tax Breaks

Wall Street Journal:

WASHINGTON -- The Internal Revenue Service is examining more than 100,000 suspicious claims for the first-time home-buyer tax break, another sign of potential trouble for the soon-to-expire program.

Read the whole story: Wall Street Journal

Comments

[mallen1330]

I am an associate of Teri-Lynn Tomazic. The photo that illustrates this story on your news/real-estate page shows a sign that identifies her by name. She has nothing to do with first-time home buyer tax credit fraud, and feels that this is a defamation of character if left as it. Please remove that photo.

[inorbit]

I wish they would examine the tax returns of every single one of these thieving Wall Street Execs, instead!

[landoffreee]

For a more perfect unions we must have:

Jobs,job securi.ty, job benefits, universal pre school-K.12, housing, affordable college education affordable health are that doesn't ban.krupt sic.k families

good articles; http://ow.ly/dmzm

a better society is one that creates opportunity & while providing safety nets and welfare programs for disadvantaged

[phatHawaiian]

why don't they try to find out where the damn bailout money went?

[ResearchtheFacts]

One phone call and they could have easily clarified if they were eligible. I bought this year but called to see if I was eligible since it had been almost 5 years since I bought the first house. Found out immediately I wasn't eligible.

[JD294]

The real beauty of this story is that we spend our time legitimately quibbling with each other about whether it is on principle important to go after an $8000 tax credit that the person who took it never had to begin with and cannot repay when nailed for it when there are people who are literally taking home billions of dollars at taxpayer expense from a financial collapse that they themselves caused and will pay no penalty for at all.

[ResearchtheFacts]

Well said.

[Haditup2here]

The whole tax system is fraudulent. If they tied the tax schedule to the average cost of living, they wouldn't need such tax deductions and all of the other deductions that really only seem to apply to business executives with pages of stipulations in terms of who qualifies.

If you don't think so, see how it feels to be single and end up in the 25% bracket (with no property) and notice how coincidentally the deduction for student loan and IRA deduction BEGINS to phase out. After federal, state, and local taxes, I think nearly 1/5th of my income went to taxes. This coming tax year it will be the same thing.

[henrypapillon]

Yeah, everybody wants a red carpet laid out to their door and wipe my nose for me , but screw the other guy and I shouldn't have to pay for it. I want excellent roads with no gas tax or too fees.

[Haditup2here]

The point that I was making is the fact that they tax system is set in such a way that those in the middle income bracket bear most of the brunt in terms of tax revenue -- paying about as much PERCENTAGE of income as those at the top. Besides, my work site has anything but excellent roads for the record.

http://www.ncpa.org/sub/dpd/index.php?Article_ID=14130

[Haditup2here]

Besides, who said anything about a red carpet? You shouldn't assume so much.

[dj5850]

I saw a lady this morning on television singing the blues because her then $255,00 condo is now worth $121,000. She somehow feels that she is entitled to some government help because she is upside down on her loan. Why do people who "rent" homes (because until you pay it off, you are renting it from the bank), feel they should be immune from depreciation. Just like the new car I bought in 2006; the moment I drove it off the lot, it lost about 20% of it's value. Should I not have to pay the note because I'm upside down on the loan?

[ResearchtheFacts]

From another perspective this crisis was caused by external circumstances outside the norm. In any investment venture you understand you could lose, however, this has been a will-fully and deceptively caused loss.

[TJCole]

What's the use our government is an apparatus, of the criminal banking aristocracy...

[JD294]

You'll don't understand. The IRS Investigating a 100,000 little people who might of filed a bogus $8000 credit on a $100,000 house will pretty much limit its resources to investigate millionaires and billionaires - the economic engine of this country. Besides, millionaires and billionaires have attorneys who fight back. Didn't the administration give up plans to audit offshore accounts to build up resources to really crack down on these home loan freeloaders? Much higher success rates picking on people who can’t make their house payment to begin with. They probably all belong to Acorn anyway, and if they need help they can go to a payday lender. The 200% interest rate actually helps the economy (contributes to GDP). Isn’t that why Congress refused to limit interest rates? This is all the better to drive up bankruptcy rates among the middle class. Sure the 2006 bankruptcy reform act helped credit card companies, but it put downward pressure on these rates. We really have to get these rates up! The legal fees alone significantly increase GDP while preserving nearly all the debt these people have anyway (taxes and penalties, school loans, legal fees and much of their consumer debt). Besides, how else are we going to keep military enlistments up to generate a “volunteer” army to fight our terror wars? Where are bankrupt people without jobs or a place to live suppose to go? This is the point! You’ll need to stop carping and get your priorities straight. Look at the upside.

[Jayk4444]

$800 million in tax fraud should be dismissed b/c of the demographic of the taxpayer?

[FoonTheElder]

$800 million is a drop in the bucket compared with what is going on with offshore tax shelters.

It is estimated that we lose $100 billion per year in offshore tax schemes. There is much more to be recovered from wealthy long term offshore tax cheats, than the $8,000 one time shot from small time tax cheaters.

http://www.huffingtonpost.com/2009/04/15/offshore-tax-havens-a-sta_n_186640.html

The Bush Administration immediately stopped the push towards working with tax shelter countries that the Clinton Administration successfully started. For the past 8 years, there has been minimal enforcement regarding offshore tax shelters.

[Laura McBride]

First time home buyers are generally young couples with kids or kids on the way. Most of them want to be in a new neighborhood with other young families; they are not in the market for older homes. So what does this tell you? It tells me that the tax credit is helping housing developers a lot more than it is helping either real estate agents (not involved in tract-house sales) or people who want or need to sell their home and move. Indeed, if some sweetener isn't added to the pot for buying older homes, then the only homes that will be sold in this country are new construction. What happens to people who already own homes and want or need to sell? They end up carrying the house if they must move, not a good idea in a consumer economy that needs them to spend money in stores. Or they end up walking away, leaving blights on the landscape and in their lives and wallets. The tax credit as written almost undeniably favors the construction industry, and penalizes current owners of homes. Indeed, the law renders many homes unsellable in markets overburdened with construction companies. Fix the new-home bias, or toss the program and prevent more distress for homeowners and/or more blights on the landscape. Extend the program to all home buyers, and the market could be whole again. And real estate agenting would once again be a viable profession.

[stavros]

"And real estate agenting would once again be a viable profession".
Half of the problem with home sales is the real estate agents charging 6-8 %.
I'm happy to see them take a back seat for a long, long time.

[Laura McBride]

How would you suggest real estate agents make a living, then? They pay for Internet advertising, print advertising and, if they are any good, they will do mailings to selected target groups. They have to have nice cars, always available and in good shape, serious cell phones, and in this market, they are scrambling 24/7. I find your attitude to be precisely what is wrong in this country. So many begrudge people who work hard and basically work for themselves, such as real estate agents, house painters, writers, and lots more, any sort of a decent living. But they look the other way when corporations are wasting money keeping slackers on the job and rewarding people outrageously for little or nothing. I, for one, have been happy to pay a real estate agent's commission when he or she brought me a qualified buyer who made a good offer on the two houses I've sold in my life. I've been just as happy to pay it when I was buying the houses; agents saved me enormous amounts of grief over doing it myself (which holds true for selling, too).
Real estate agents and their fees are not the problem; begrudgers and overpaid slackers (such as bank CEOs) are.

[ibsteve2u]

lollll....methinks the WSJ is starting to reflect the influence of Murdoch...and you can't necessarily trust their stories.

For instance, the story quotes "Ted Gayer, an economist at the Brookings Institution, a liberal think tank based in Washington" for some key numbers it uses to pound its point home.

Observe the description of "liberal" think tank, thrown in presumably to suggest that "even the liberals say its bad".

lollll....now go to SourceWatch to read the reality: http://www.sourcewatch.org/index.php?title=Brookings_Institution

[bq]
Initially centrist, the Institution took its first step rightwards during the depression, in response to the New Deal. In the 1960s, it was linked to the conservative wing of the Democratic party, backing Keynsian economics. From the mid-70s it cemented a close relationship with the Republican party. Since the 1990s it has taken steps further towards the right in parallel with the increasing influence of right-wing think tanks such as the Heritage Foundation.
[eq]

lollll...man...once Murdoch buys something, its usefulness as a source of facts comes to an end.

[norman60]

I think the program should not be extended in time beyond Nov. 30, nor expanded in scope to include non-first time buyers. If what Bonnie Speedy, national director of AARP Tax-Aide said is true that relatively loose standards for claiming the credit, then, I think IRS officials who had the oversight for, designed and authorized payment of the 100,000 suspicious claims, without proper checking should be fired. I think all false claimants should be prosecuted because our society should not smile at and reward fraud every time. Why should the IRS give out bogus credits first and start investigating 167 "criminal schemes" involving the credit later? How many IRS do we have? I think the IRS itself should be investigated to see if they know what they are doing.

[KarateKid]

I wonder how Teri-Lynn Tomazic feels about having her Re-Max sign used for an unflattering article?

[mallen1330]

Where did you see the photo you refer to? I'm an associate of Teri-Lynn.

[GardenerNorCal]

Who wrote the original bill? If it was as intended for the purchase of a home by first time buyers, why wasn't it tied to a real estate transaction? What was the motivation to leave all the loopholes? Who benefitted from this the most? I thinking not the first time home buyers. And there's talk to extend it and open it without the first time buyer restriction? Does this make sense? Why not just write an individual mandate and make all of us purchase new homes? I forgot all taxpayers would be doing just that, the only thing is our names won't be on the titles and we won't be allowed to live in them.