Prisoners Cash in on Homebuyer Tax Credit Posted by AVCU on 9:37 AM

More than 1,200 prison inmates, including 241 serving life sentences, defrauded the government of $9.1 million in tax credits reserved for first-time homebuyers, according to a Treasury Department report released this week. Sixty-one percent of the lifers who got credits were incarcerated in the Sunshine State. Thousands of people also filed multiple claims or made claims outside the allotted time period. In all, more than $28 million was improperly doled out in homebuyer tax credits.
The homebuyer tax credit program was very specific about the time period in which homebuyers were allowed to participate. The credit was for home purchases that happened after April 8, 2008, with a cut-off date that was eventually extended to May 1, 2010. The report found that the IRS awarded $17.6 million to 2,555 filers who had bought their homes before the credit program kicked in. The inspector general also identified 206 filers who claimed the credit for multiple addresses; these fraudulent filers were awarded a total of $1.4 million. Improper filers included 34 IRS employees. This is in addition to 53 IRS employees that the inspector general identified last year as improper filers. The IRS, which awards $12.6 billion in claims to 1.8 million participants, says it has ramped up efforts to crack down on criminal activity.

(Source: "Prisoners Cashed in on Homebuyer Tax Credit," CNNMoney.com, Aaron Smith, staff writer, June 23, 2010)