Inmates Get Homebuyer Tax Credits: Gov't Report

[carreraken]

From cnbc:

Nearly 1,300 prison inmates wrongly received more than $9 million in tax credits for homebuyers despite being locked up when they claimed they bought a home, a government investigator reported Wednesday.

The investigator said 241 of the inmates were serving life sentences.

In all, more than 14,100 taxpayers wrongly received at least $26.7 million in tax credits that were meant to boost the nation's slumping housing markets, said the report by J. Russell George, the Treasury Department's inspector general for tax administration.

Some taxpayers received the credit for homes purchased before the tax break was started. In other cases, multiple taxpayers improperly used the same home to claim multiple credits. Investigators found one home that was used by 67 taxpayers to claim credits.

"This is very troubling," George said. "Congress created and modified the homebuyer credit to stimulate the economy and help taxpayers achieve the American dream, not to line the pockets of wrongdoers."

[m21sniper]

This is hardly surprising.

[Rot 911]

It is crap like this that makes it hard for most hard working people to stay honest. Why should they? They work, hope to live the American Dream, perhaps on a small scale depending on their income, while the rest of the people spend their day trying to cheat them out of their money.

[RWebb]

huh!

what with that and the health care, maybe I should...

[stomachmonkey]

Are we shocked that criminals will behave like, well, criminals?

[jyl]

One problem with the financial and economic literacy of the average American is the inability to assess the relative scale of things. People get worked up about things that are trivial.

The first-time homebuyer tax credit (original plus extension) has cost roughly $20BN ($16BN as of May and the final month was expected to add another couple $BN). Recent reports say about $30MM of credits have been fradulently claimed. Some portion of that will be recovered (maybe not from an inmate, but pretty obvious how to recover an over-credit from someone who is going to pay taxes next year). But assume zero recovery.

That is a 0.15% error rate (15/100ths of 1 percent).

Do many of you achieve less than a 0.15% error rate in the complex things you do?

[TechnoViking]

Thank you. I thought the same thing when I saw the ~$30M number. Yea it's a shame, but a pretty small percent compared to the total.

To put it in another perspective, $30M is 0.0004% of the money we handed over to the banks and auto manufacturers last year.

Who are the real criminals?

[Rick Lee]

And you want to be my latex salesman. I don't think so.