Fraud for dummies
- Michelle Wood: SWCD
- November 13, 2009
- 867
As most of you know, there is a "first-time" home buyer's credit available to taxpayers who have purchased a home for the first time within specified dates. The credit is 10 percent of the purchase price of a home up to $8,000 per tax return and available to anyone who hasn't owned a house in the past two years.
The filing requirements are pretty complex. You have to (1) list a property location, (2) list the date bought and (3) list the amount paid for the house. That is it. There are no other reporting requirements.
So if you pick the address of a local vacant (or not vacant) property, plug in a date and say that you paid $80,000 for it, the government sends you a check for $8,000.
No. It isn't any harder than that. So with something so simple to report and not being required to prove any of it, do you suppose there would be any unscrupulous people to take advantage of it?
Do you think?
Well, Congress was just told that 19,000 people did just that. They made up an address, plugged in a date and said they paid $80,000 for their house. That's right, they made it all up out of thin air.
And yes, the government did pay them the $8,000 they requested. Now they have to try to get it back. Good luck on that one.
This was a partial report based on a limited number of audited returns. There are another 74,000 "suspicious" home purchases yet to be looked into in the "preliminary" report.
Wonder what they are going to find if they audit every single taxpayer who took the first-time home buyer credit.
I mean there is "stupid" and then there is "government stupid." This is government stupid at its finest. Why not require documentation to prove the purchase? Like maybe a real estate settlement statement.
I know they can be faked too. But at least it makes the thieves do a little work for their check.
The report said that more than 500 people under the age of 18 claimed the credit also. That includes one taxpayer who is four years old, according to his Social Security number.
Now I know that most people are honest and that only a few bad apples spoil the whole basket but this stinks to high heaven.
Also uncovered in the "preliminary" report were 53 IRS employees who claimed the credit erroneously. That is tax fraud, my friend.
Remember that I said this was a "preliminary." Can't hardly wait till they do a full report on this one.
Bill Weber, CPA, has been advising businesses for more than 30 years. He has served in leadership with Crown Financial Ministries and is a church co-coordinator for Financial Peace University.
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