Fraud vs. homebuyer tax credits
Will reports of 4-year-olds claiming first-time homebuyer tax relief kill a push in Congress to extend the program?
Is this child too young for a first-time homebuyer tax credit?
(Corbis/Chris Carroll)
The $8,000 federal tax credit for first-time homebuyers has been “immensely popular,” says Luke Mullins in U.S. News & World Report. In fact, it “may have become too popular”—according to a Treasury Department inspector general, 90,000 “sketchy” claims have been filed for the tax perk, including “one extreme case” where the “buyer” was a 4-year-old. That’s “wonderful ammunition” for people who want to prevent an extension of the credit.
The 4-year-old is only the youngest of 500 or so listed buyers under 18, says Patricia Murray in Politics Daily, which means that some adults are trying to skirt the income ceiling or first-time buyer requirement. But then again, “there is currently no law limiting the age of tax credit recipients.” So the real lesson here is that if Congress wants to extend the credit—and it does—it needs to tighten the rules and beef up the IRS’s fraud prevention.
Forget the fraud, says the San Francisco Chronicle in an editorial. Fiscal sanity is reason enough to scrap this “boondoggle” for the already heavily “subsidy-doused” home-builder industry. It risks re-inflating the housing bubble, and extending the tax credit—or even expanding it, as some lawmakers suggest—could turn a short-term “recession fighter” to a “flat-out entitlement.”
“I’m no economist,” says Malcolm Berko in the Chicago Sun-Times, but there should be “some room to negotiate” between the “negative Nellies” who want to scrap the tax credit and the lawmakers and Realtors who want to keep it going past Nov. 30. Both sides have good arguments. But in the end, “the housing industry is the heartbeat of our economy. So if it’s time for the defibrillator paddles, how can you say no?”
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5 Comments
Posted by Zoe, Friday, October 23, 2009, 1:48 pm Some of my dolls are over 18 years. Drats, I should have signed them up and we could have gotten a home. I didn't realize that I could lie, cheat and steal my way to riches. What is wrong with these people??? Is the process THAT easy to fool? Even IRS employees got into the act. Another example in which government should get out of people's lives and their businesses. Too much corruption in the ranks of government programs.
Posted by Jeremy McMillon, Friday, October 23, 2009, 3:18 pm The worst part is those of us who truely deserve the credit are waiting 12 weeks longer than promised or longer.
Posted by Madeline, Friday, October 23, 2009, 3:50 pm Heck no, don't scrap the program. It wasn't the program that committed fraud. I say fine the folks that committed the fraud 32,000. Three times the amount of the tax credit ought to get their attention, and caution others thinking of doing the same thing.
Posted by Cheree, Saturday, October 24, 2009, 3:13 am If I lie, cheat, steal, or kill, does that make the law enforcement administration wrong? It is what it is people:Fraud. Let the people who commit the fraud see consequences. Let the people who need a real tax break receive relief. That's all there is to it.
Posted by annemarie kenny, Saturday, October 24, 2009, 8:36 am I agree let the greedy people that commited fraud pay, and allow the people that can afford to pay over a thousand dollars in rent a month but cannot afford a down payment recieve the tax credit and allow that 8.000 to help towards it. Also perhaps having the govt help build more moderate housing so we all can have the American dream. how is it possible the same house can cost so much more a town away from where you work or want to live.
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