NPR on Homebuyer Tax Credit Fraud

According to this NPR story, "Thousands of people have gotten first-time homebuyer tax credits they don't deserve ... Some of these suspicious claims come from people who are writing off interest payments on another house." The IRS "highlighted nearly $500 million in homebuyer tax credits claimed by people who don't appear to qualify."

The Wall Street Journal reports:

Among those claiming bogus credits, at least some of them were definitely first-timers. The credit has already been claimed by 500 people under the age of 18, including a four-year-old. This pre-K housing whiz likely bought because mom and dad make too much to qualify for the full credit, which starts to phase out at $150,000 of income for couples, $75,000 for singles.

The NPR article points out that "the IRS doesn't require people applying for the credit to prove they've purchased a house." Frank Keith, a spokesman for the IRS, says "the IRS doesn't have the authority to reject a claim for the tax credit without doing a full audit first." So, "the IRS is reportedly trying to audit almost everyone who claims it this year."

Someday, the government should consider opening offices where you can show up, choose from a menu of government handouts, present ID, and walk out with your check. At least that would be efficient. Oh wait, I forgot about my last trip to the DMV.