The IRS is dubious of more than 90,000 first-time homebuyer tax-credit claims. (Photo: iStockphoto)
How far would you go to claim the $8,000 first-time homebuyer credit? The tax credit is available to "first-time" homebuyers who purchase a home by the end of next month.
Many of our blog's readers have written in saying they would do almost anything to qualify for the credit, and would even purchase a home they're not totally thrilled about to get the credit.
But some people, apparently, are willing to go further than just buying a home they're not wild about. Others reportedly are willing to commit fraud and to lie to the Internal Revenue Service (something I wouldn't personally do) to get the $8,000 -- more than 19,000 people have already claimed the credit without actually buying a home, says Baltimore Sun reporter Jamie Smith Hopkins. (And so many of our readers are worried about closing on a home before the deadline expires...apparently, some people don't worry about such things!)
Millions of bogus claims
There may be more than $600 million dollars worth of fraudulent first-time homebuyer tax-credit claims, officials testified in Congress last week. More than 1.4 million first-time homebuyer tax-credit claims has been filed since late August, says the Los Angeles Times.
The term "first-timer homebuyer credit" is actually a bit of a misnomer. To qualify for the credit, one doesn't have to actually be a "first-time" homebuyer -- you just have to have not owned a home in the past three years.
Hopkins notes that more than 70,000 non-first-time homebuyers have claimed the credit -- and this means buyers who meet the more lax definition of "first-time homebuyer" that I explained above.
Meanwhile, there are multiple reports of people under the age of 18 (who in many cases, wouldn't be able to purchase a home) receiving the credit -- at least one 4 year old has received the tax credit, says U.S. News & World Report . I'd like to see those kids' piggy banks!—Lauren Baier Kim