You should all be familiar with the new tax incentive available for first time home buyers that is set to expire this November 30. The incentive provides for up to an $8,000 tax credit, (that’s real money), for qualifying first time home buyers, and was intended to stimulate the real estate market.
Recently the IRS came out and said that they had uncovered a significant amount of fraud by those claiming the credit (I’m shocked, absolutely shocked!). In one case the credit was claimed by a four year old who allegedly had bought his first home…what an enterprising young tyke! Before long we will probably see him on cable TV doing infomercials on how to buy real estate with nothing down and money from the government. Helps him pay for his pampers….In response the IRS has announced that they will be approaching an audit rate of nearly 100% on tax returns claiming this credit.
Faced with reports of fraud and abuse, what does Congress do? Expand the program, of course! Yup, the Senate is expected to pass a bill this week to extend the credit into 2010 and expand it to more people beyond first time home buyers.
I’d have a punch line inserted here but I don’t think its necessary