Thu, July 30, 2009
First-Time Homebuyer Credit Attracting Scam Artists
I can’t say I’m very surprised by this: the IRS is reporting its first prosecution of a fraud scheme involving the new $8,000 first-time homebuyer credit.
Wherever there are tax breaks, you’ll always find some crooks looking to exploit them. When Congress created a tax credit intended to encourage first-time homebuyers, it seemed likely that someone would try to get the break without actually buying a house. The first case involves a Florida tax preparer who now faces jail time, a $250K fine, or both.
The news release indicates that the agency has 24 criminal investigations open relating to the credit and its investigative chief says that the IRS “will vigorously pursue anyone who falsely tries to claim this or any other tax credit or deduction. The penalties for tax fraud are steep. Taxpayers should be wary of anyone who promises to get them a big refund.”
The IRS site provides information for those interested in legitimately taking advantage of the first-time homebuyer’s tax credit. The purchase must close before December 1, 2009, and a first-time homebuyer is a person who has not owned a primary residence in the US in the past three years. Other provision details, including income limits, are provided on the IRS site.