Massive social program hemorrhages money due to fraud - there's a shocker. At least we've learned our lesson from this and aren't discussing an expansion of another massive social program any time soon.Just as Congressional leaders are calling to extend a popular $8,000 tax credit for first-time homebuyers, or even to expand it to all home purchasers, government investigators are reporting new findings that point to widespread abuse and errors in the program.
A new report from the Treasury Department’s inspector general said that as of Sept. 30 the Internal Revenue Service had identified 167 suspected criminal schemes and opened nearly 107,000 examinations of potential civil violations. In late July, the I.R.S. announced its first successful prosecution, of a tax preparer.
While government officials said many suspected abuses could turn out to be simple errors, the Treasury investigation found examples of claimants who pretended to be first-time buyers when they already owned homes, or had not yet purchased one. Some claims were filed for children as young as 4 years old.
In all seriousness though, I'm glad that Obama isn't supporting an expansion of this, and hope that this article gives him the push he needs to end it altogether.
This might sound bad, but why on earth was this program open to people with incomes below a certain level? $50k is enough to buy a home in many places, but you'd think they'd refuse to offer the credit to people making less than, say, $30k.Of 1.4 million claimants to nearly $10 billion in credits, 60 percent had incomes below $50,000, raising questions about whether some of them could afford a home.
The $8,000 credit is available to individuals earning up to $75,000 a year and couples with income up to $150,000; people above those limits can get smaller benefits but the credit phases out at $95,000 for individuals and $170,000 for couples. It is a refundable credit, so taxpayers get a check for any amount beyond their tax liability.
If we have a housing crisis created by people buying houses that they couldn't afford, it seems kind of stupid to try to fix it by incentivizing people to buy houses that they can't afford.