The last couple days I've been in German Village and it's been beautiful

The WSJ reported yesterday that the Internal Revenue Service is, “examining more than 100,000 suspicious claims for the first-time home-buyer tax break.”

About 4-5 weeks ago I had heard around 3,000 cases had been opened but potential fraud on this kind of scale makes me think that Congress would be even less likely to approve an extension of the $8,000 tax credit for Columbus 1st time home buyers, let alone open the tax credit program up to all home buyers.

My favorite quote from that WSJ article, “A spokesman for the National Association of Realtors, Lucien Salvant, said, “Any time there is a lot of money around, there is going to be people attracted to it with evil intent.”

This morning, NPR had a good story on Morning Edition along the same lines.  In a recent audit, The Inspector General’s office highlighted nearly $500 million in homebuyer tax credits claimed by people who don’t appear to qualify.

At the House Ways and Means Committee hearing Thursday, Russell George, the  inspector in charge of watching over this, “is expected to release another, more damning report. His biggest complaint — and something he’s been talking about for months — is that the IRS doesn’t require people applying for the credit to prove they’ve purchased a house.”

Personally, I’ve talked to potential home buyers this year who wanted to get creative about claiming the credit by putting it in a spouse’s name or “claiming” to live in a rental property or some such thing. Of course I steer clear of commenting in such conversations and always refer people to their accountant for clarification on what’s allowed.