IRS has 107,000 open cases of people who filed for the $8,000 refundable tax credit for being a first time home buyer, including illegal aliens who never bought a house and a 4 year old
NY Times Story
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Hmmm – government gives away “free money” and discover that people lie to get it? Wow, who woulda thunk it!
The Inspector General made the point that fraud is going to always result with a refundable tax credit – if it just reduced people’s taxes to zero, there would be no motivation. Many of the cases were people who claimed to be “first time” home buyers who had recently been claiming a deduction for interest on a mortgage. The IRS plans to add a test to spot that condition when people file for the credit.