Friday, October 23, 2009
WASHINGTON (AP) — The rush to implement a tax credit for first-time home buyers opened the program up to potential fraud by people who hadn’t bought a home or already owned one, Congress was told Thursday.
J. Russell George, Treasury Inspector General for Tax Administration, questioned the eligibility of some 100,000 claims out of the 1.5 million who have sought to take advantage of the $8,000 tax credit incorporated in the economic stimulus package enacted last February.
He said claimants include those who possibly could be illegal immigrants and that 580 people seeking $4 million from the first-time home-buyer credit were under age 18. The youngest taxpayers receiving the credit were 4 years old, his office said.
George and an Internal Revenue Service official testifying before a House Ways and Means Committee subcommittee stressed that many of the questioned claims eventually may be found to be legitimate after further examination.
But the hearing raised a yellow flag as Congress considers whether to extend or even expand the popular program that is set to expire at the end of November.
The top Republican on the panel, Rep. Charles Boustany, Jr., of Louisiana, said that though the issue of extending the credit was not the purpose of the hearing, “every time Congress creates a new refundable credit ... the incentive for fraud is magnified.”
Linda Stiff, IRS’ deputy commissioner for services and enforcement, said the agency “will vigorously pursue those who filed fraudulent claims.”