By: Zachary Pienkowski
Everyone knows that over the last year and a half the United States has gone through one of its most trying economic downturns in its history. One of the worst areas of commerce, and culprits of the problem, was the residential housing market. In an attempt to jump-start the residential housing market and encourage people to purchase homes, the government established a first time home buyers tax credit program. A program that has been seen as a success has hit its first snag. Congress is concerned that more than 19,000 people filed for the tax credit on their 2008 returns for homes that they had not yet purchased. This resulted in a potential loss of nearly $130 million in fraudulent tax credits. In addition to this the IRS has discovered claims of $500 million from 74,000 tax payers that had indications of prior home ownership. Due to the inability to electronically check the validity of any documentation, the IRS did not require tax payers to provide any documentation at all to verify the purchase of a home. Since the IRS has found out of the fraudulent claims they have tightened oversight of this process and will hopefully alleviate the problem of any unwarranted claims. Its of concern to Congress that this issue be resolved as quickly as possible because the program is scheduled to end within the next month and the housing market remains shaky. In an effort to continue to rebuild the economy there is talk to expand and extend the program, but concerns of cost remain the hurdle and it will be difficult enough to finance, let alone have to worry about fraudulent claims.
http://news.yahoo.com/s/ap/20091022/ap_on_go_co/us_homebuyers_tax_credit
http://news.yahoo.com/s/ap/20091022/ap_on_bi_ge/us_mortgage_rates_3
http://money.cnn.com/2009/10/21/real_estate/commercial_real_estate_bubble.fortune/index.htm?postversion=2009102210
Everyone knows that over the last year and a half the United States has gone through one of its most trying economic downturns in its history. One of the worst areas of commerce, and culprits of the problem, was the residential housing market. In an attempt to jump-start the residential housing market and encourage people to purchase homes, the government established a first time home buyers tax credit program. A program that has been seen as a success has hit its first snag. Congress is concerned that more than 19,000 people filed for the tax credit on their 2008 returns for homes that they had not yet purchased. This resulted in a potential loss of nearly $130 million in fraudulent tax credits. In addition to this the IRS has discovered claims of $500 million from 74,000 tax payers that had indications of prior home ownership. Due to the inability to electronically check the validity of any documentation, the IRS did not require tax payers to provide any documentation at all to verify the purchase of a home. Since the IRS has found out of the fraudulent claims they have tightened oversight of this process and will hopefully alleviate the problem of any unwarranted claims. Its of concern to Congress that this issue be resolved as quickly as possible because the program is scheduled to end within the next month and the housing market remains shaky. In an effort to continue to rebuild the economy there is talk to expand and extend the program, but concerns of cost remain the hurdle and it will be difficult enough to finance, let alone have to worry about fraudulent claims.
http://news.yahoo.com/s/ap/20091022/ap_on_go_co/us_homebuyers_tax_credit
http://news.yahoo.com/s/ap/20091022/ap_on_bi_ge/us_mortgage_rates_3
http://money.cnn.com/2009/10/21/real_estate/commercial_real_estate_bubble.fortune/index.htm?postversion=2009102210
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