BluefoxToday blog : 47,000 Fillings To The IRS For First Time Homebuyer Tax Credit May Have Been Fraudulent

47,000 Fillings To The IRS For First Time Homebuyer Tax Credit May Have Been Fraudulent

Recent reports from the Inspector General are indicating that as many as 47,000 fillings to the IRS for the First Time Homebuyer Tax Credit may have been fraudulent.  If correct this would represent approximately $513,000,000 of taxpayer money that was awarded to Homebuyers that did not really qualify for the First Time Homebuyer Tax Credit.

The Justice Department began an investigation this past February to track down fraudulent claims from across the country.  As a result of this investigation several tax preparers have been sued nationwide, and six major lawsuits have be filled to stop what they are referring to as "Taxation Lapse Preparers"  from "fraudulently claiming a first-time home customer taxation credit and a earned-income taxation credit."  I expected that the First Time Homebuyer Tax Credit would have generated fraudulent activity, but never did I think that it would have reached this level.  This type of fraudulent activity is unacceptable, and I hope that everyone that is caught is prosecuted to the full extent of the law.

The First Time Homebuyer Tax Credit generated business for me, and I for one saw it as a positive program, but I had hoped that it would have started more of a spark in the Real Estate Industry than it did.  I am sure that we will be hearing more about this as these lawsuits progress, and more fraud is unveiled.

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Who To Call For Your Mortgage Needs In Connecticut:

George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308, gsouto@mccuemortgage.com, or visit my McCue Mortgage Homepage.

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 Info about the author:

George Souto NMLS# 65149 is a Loan Originator who can assist you with all your #FHA, #CHFA, and #Conventional #mortgage needs in Connecticut. George resides in Middlesex County which includes #Middletown, #Old Saybrook, #Middlefield, #Durham, #Cromwell, #Portland, #Higganum, #Haddam, #East Haddam, #Moodus, #Chester, #Deep River, and #Essex. George can be contacted at (860) 573-1308 or souto@snet.net

Comment balloon 18 commentsGeorge Souto • April 18 2011 03:36PM

Comments

George,

Staggering number there, like you I knew it would be taken advantage of but never....

Patrick

Posted by P.J. Virgilio Jr., Realtor 408-568-6578 Selling homes in the Greater San Jose area and South through San Martin, Gilroy, San Juan Bautista and Hollister as well! (Keller Williams Realty Silicon Valley) over 7 years ago

George....why am I not shocked at those figures....if their is a way to try and beat the system their are people who will try...shame on them.

Posted by Dennis Duvernay Broker/Owner (Hillview Realty) over 7 years ago

George , this is just so crazy our Government spend money so recklessly, and doesn't seam to have simple measures in place to identify fraudulent activities. I dealing with a lender right now that can't see their way clear to a good deal...after financing a bad deal that got us in the trouble in the first place.

Posted by Steve Loynd, 800-926-5653, White Mountains NH ( Alpine Lakes Real Estate Inc., ) over 7 years ago

Patrick, yes that much was a surprise.

Dennis you are right and I hope they get the book thrown at them.

Steve, the fact that they did not have the system in place to prevent this, just seems to be par for the course with everything they do.

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) over 7 years ago

George, where there's a way to scam the system there will be people that try.  Like you I didn't think the numbers would be that high.

Posted by Nick T Pappas, Madison & Huntsville Alabama Real Estate Resource (Assoc. Broker/Broker ABR, CRS, SFR, e-Pro, @Homes Realty Group, @HomesBirmingham & Providence Property Mgmnt, LLC Huntsville AL) over 7 years ago

Unbelievable George! And so sad, that people would take advantage of something like this and take from people who truly needed the help. Unbelievable.

Posted by Al & Peggy Cunningham, Brokers, Our Family Wants To Help Your Family! (RE/MAX West Realty Inc., Brokerage) over 7 years ago

Disgusting! How do people sleep?

Posted by Kelly Turbeville, Turning Real Estate Dreams into Reality (Keller Williams) over 7 years ago

George, I had seen this some time ago, and it's not that hard to believe. So many people know how to game the government, and they know there are so few people that really care in government service that they can get away with it. There's no accountability

Posted by Ed Silva, Central CT Real Estate Broker Serving all equally (RE/MAX Professionals, CT 203-206-0754 ) over 7 years ago

George,

This reminds me of a conversation I had earlier last year with someone who was purchasing a second home...I believe there was a second home or move up tax credit, but not as much.  I hope that those figures are wrong, but no, I am no longer amazed:(

Posted by Karen Hurst, Rhode Island Waterfront! (RICOASTALLIVING.COM) over 7 years ago

George - To commit fraud over so little gain is really a sign of stupidity,not just a lapse in moral judgment.  Can you imagine being in zebra stripes telling another inmate that you're doing time for defrauding the Federal government of $7,500?  At least the banksters on Wall Street can brag that they defrauded the taxpayers of billions...but wait a minute, they didn't go to prison, did they? ;)

Posted by Gail Robinson, CRS, GRI, e-PRO Fairfield County, CT (William Raveis Real Estate) over 7 years ago

 George,

Why can't people use their brains for good instead of for fraud?

Ann Hayden in Wildwood, MO

Posted by Ann Hayden, SelectAnn.com (Berkshire Hathaway HomeServices Select Properties-St. Louis Missouri) over 7 years ago

Talk about having some balls George! The IRS is something I would never want to fool around with.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) over 7 years ago

Nick yes that was a little bit of a surprise

Al and Peggy, they are not only taking from them but from all of us who are taxpayers

Kelly I don't know.  I know I could not if I did something like that.

Ed hopefully they will not get away with this.

Karen I expected some fraud but not this much.

Gail no they did not go to prison but they should have.  And I agree it is very stupid to risk so much for so little.

Ann, you are right can you imagine what a better world this would be if they did.

Bill you and me both.

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) over 7 years ago

This is a great post George.  Of course with something good there has to be scam artists that have to work the system to make it bad.  I hope they're caught and prosecuted.

Posted by Karen Bernetti over 7 years ago

George,

It would be a wonderful place!

Ann Hayden in Wildwood, MO

Posted by Ann Hayden, SelectAnn.com (Berkshire Hathaway HomeServices Select Properties-St. Louis Missouri) over 7 years ago

George, Wow!  I can't even imagine how this happened. Too much government?  LOL!

Posted by Frances C. Rokicki, Broker-Mentor,CRS (Fran Rokicki Realty, LLC) over 7 years ago

George -- I am not surprised by this type of thing anymore. Everywhere you turn you hear about people scamming and committing fraudulent activity.  I hope they all get caught and the IRS takes care of them big time because it's just not fair for those of us who abide by the rules and then have to pay more for their nonsense.

Posted by Barbara Altieri, REALTOR-Fairfield County CT Homes/Condos For Sale (RealtyQuest/Kinard Realty Group, Fairfield and New Haven County CT Real Estate) over 7 years ago

George,

The systems probably were not all that well thought out of from the beginning and plenty people saw an opening for shenanigans. Hopefully all the frauds get stretched on the rack.

Posted by Esko Kiuru over 7 years ago

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